The Sun says James is a shock target for Brighton in a £10million deal after some eye-catching displays.
The pacy right-back, 18, has starred on loan for Championship Wigan this season.
And the Seagulls have seen enough to line up James as a big signing and long-term replacement for Spanish defender Bruno, 38.
James is known to Albion's new director of football and ex-FA chief Dan Ashworth from his time with England's Under-20s.
Brighton plan to look at the domestic youth market for more signings — with Ashworth's knowledge a key addition to their team.
Ashworth has already been to see James playing for Wigan while also keeping an eye on Latics impressive midfielder Nick Powell, 24.