It is said Ronald Koeman is interested in bringing the winger to the South Coast to replace former Southampton captain Adam Lallana.
It is unclear whether the Saints will return with a renewed bid, with Sky Sports also saying that Townsend is eager to stay and fight for his place at a club he has been at since he was 8-years-old.
Southampton fans will just be happy that their club are pursuing young players with plenty of potential, rather than the other way round, after several of their strongest players from last season were snapped up by sides that finished above them in 2013/14.
Townsend was reportedly a target for current Spurs boss Mauricio Pochettino when the Argentine was in charge at St Mary's and it appears that new Saints boss Ronald Koeman is also a fan of the jet heeled winger.
The Spurs graduate has been linked with several clubs during this transfer window, having been mentioned as a makeweight in the North London club's bid for QPR forward Loic Remy in recent weeks.
However, given that the 24-year-old impressed after replacing Aaron Lennon in the side's 1-0 win over West Ham on Saturday, as well as featuring regularly in preseason, it remains to be seen whether Tottenham will entertain letting Townsend leave.
One possible outcome would be the England international playing a part in the resolution of Spurs' interest in Southampton's French midfielder Morgan Schneiderlin, with Pochettino eager to make his former player part of the setup at White Hart Lane.
With negotiations regarding such a deal likely to be complex and not particularly easy, it will be interesting to see what Southampton's next move is regarding their pursuit of Townsend.