Watford are no longer attempting to sign the Tottenham midfielder.
The Hornets have been looking to bring Stambouli to Vicarage Road for much of the summer, but a report in the Waford Observer claims that they are no longer looking to sign him due to delays in the deal being completed.
The Golden Boys had an offer accepted by Spurs for the transfer of the Frenchman, and were confident of completing a deal last week.
Stambouli, 24, has his heart set on a return to France, according to the Standard, and although the two clubs have not agreed a deal yet, he has delayed a move to Watford to see if PSG increase their attempts to sign him.
This has resulted in the Hornets ending their interest in Stambouli, with a move to France almost a certainty this summer.
The newly promoted Premier League club are put off by his hesitancy, and will now be tracking other targets who are more willing to agree a move to Hertfordshire ahead of the new season.