Karl Darlow leaves Walsall for a second time

The Blades are reportedly keen on the in-form winger, who has seven goals this term, with Danny Wilson looking to mount a promotion push.

Paterson has made 32 appearances this season to become a key figure in Dean Smith's plans, after breaking into the side under Chris Hutchings in 2010.

The 21-year-old has played 83 games for the Saddlers, scoring 10 times, since his debut against Chesterfield two and-a-half-years ago and signed a two-and-a-half year deal in November 2011.

Sheffield United also signed Darryl Westlake from the Saddlers last summer, after agreeing compensation when the right-back opted not to extend his contract at the Banks's Stadium

But the Saddlers will want to hang on to Paterson, especially after Nottingham Forest recalled Darlow.

The 22-year-old only returned to Walsall on New Year's Day – after a successful loan spell earlier in the season – but is now expected to make his full Forest debut at Peterborough tomorrow.

It's the second time Darlow's loan has been cut short and the Saddlers had been hoping to keep him until the end of the season.