Blackburn boss Roy Hodgson has broken the club's previous transfer record after failing to sign Pierluigi Casiraghi, the Italian who joined Chelsea on Friday.

Davies, 21, joined the Ewood Park club on Monday for a reported seven-year contract worth £20,000-a-week.

Southampton will receive almost 10 times the £750,000 they paid for the player a year ago.

But Chesterfield look set to miss out entirely because unlike many smaller clubs when they are selling players, they did not include a clause guaranteeing them a proportion of any future profit.

The England Under-21 player follows in the footsteps of another international forward, Alan Shearer, who moved from the south coast club to Ewood Park.

Southampton's fans are likely to be angry that another promising young star has been allowed to leave the Dell.

Davies scored 12 goals for Southampton in an injury-hit first year in the Premiership, including one at Goodison Park which was regarded as one of the season's best, and another against Manchester United.

Dundee to Liverpool

Roy Evans is buying a striker while Robbie Fowler recovers

Meanwhile, Liverpool have completed the £2m signing of South African born striker Sean Dundee from the relegated German club Karlsruhe.

Dundee, who has German citizenship, has signed a three-year contract.