The north London side are in talks with the Hornets over a sale.
Indeed, the Standard suggest the White Hart Lane outfit are keen on selling the Frenchman for as close to the £9 million fee they paid for him as possible.
The Hornets, however, want Capoue on an initial season-long loan deal.
That has caused disagreement during transfer talks, say the Standard, meaning Tottenham are currently no closer to offloading a player they are very keen to sell.
You can see where Daniel Levy and co are coming from in this instance.
Capoue has flattered to deceive at Spurs and a similarly disappointing season for Watford in the Premier League may not only deter the Hornets from taking him on a permanent deal but also other potential suitors.
Holding out for as much as possible now, then, could save a big loss later down the line - especially considering the fee Tottenham are getting for Paulinho, who the Standard suggest was also wanted by Watford but is joining Guangzhou Evergrande.