The clubs had agreed terms on a season's deal for England international Tomori after it became clear Antonio Rudiger would not be leaving Stamford Bridge, only for the 22-year-old to change his mind at the 11th hour and leave West Ham still searching for a centre-back.
They have had a number of offers rebuffed at home and across Europe, so they will now take their search into the Championship, with Premier League clubs still able to sign players from the lower divisions until October 16.
Dawson would be available for a nominal fee, with the Hornets preferring a permanent deal to get his wages off their books.
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