Watford face a damaging financial headache if they are relegated as a number of their stars have their salaries ring-fenced, Sportsmail can reveal.

The majority of players at Vicarage Road are contractually obliged to take pay cuts of up to 50 per cent if the club are relegated to the Championship this week. But a number of their biggest earners are not bound by those deals.

The prospect of players continuing to receive Premier League money while playing in the second tier would become a major strain on the club’s finances.

It would almost certainly mean Watford looking to sell their highest earners — although parachute payments could make it easier to sustain the existing wage bill in the short term.

Watford are also in discussions with sacked boss Nigel Pearson over a settlement pay-out — which includes resolving the manager’s lucrative survival bonus.

Pearson’s contract entitled him to what is understood to be in the region of a seven-figure sum if he guided Watford to safety.