The striker is unwanted at Anfield, failing to make the bench in either of the club's first two games, and The Mirror reported earlier this week manager Brendan Rodgers has given him permission to seek a move.
GianlucadiMarzio.com report Serie A side Sampdoria are interested, but Mario Balotelli wants to stay in England.
It is reported he has 'two or three' offers from Premier League sides, with Watford the only club named.
Balotelli has not yet made up his mind on his destination, but Watford would be a fascinating one, but a move would likely involve him having to take a wage cut.
Watford are owner by Italian businessman Gino Pozzo, who has invested well so far this summer, and looked to Italy, where he has knowledge of the market thanks to his other role as Udinese owner, with this week's deal to sign Alessandro Diamanti the latest instance.
From a price tag point of view, Balotelli could be affordable, with The Mail reporting he is available for just £7 million, while long-term he could have a high re-sale value if he recaptures his best form.
He would have to win a place in the side from Troy Deeney and Odion Ighalo, but a change of scenery could do the maverick forward good.