Bates is furious over an alleged attempt by Barry Kilby to attract Grayson to Burnley, who yesterday appointed former player Brain Laws as their new manager, following Owen Coyle's decision to leave for Bolton Wanderers.
Bates said: "Why would Simon want to leave Leeds for Burnley? I mean they are a small manufacturing town in Lancashire. Simon is a Yorkshireman. We have 10 times their population, 50 per cent bigger gates than Burnley and we beat them pre-season anyway.
"They might be in the Premier League now but I think they lost £9million last year and, if they come down, they will go back to where they came from - whereas Leeds are on the up.
"Simon has already asked why would he want to leave Leeds for Burnley? He wants to manage in the Premier League with Leeds United and that is what he is going to do, hopefully sooner rather than later."