The 22-year-old is expected to be looking for a new team as he is set to be replaced at Renault by test driver Fernando Alonso at the end of the campaign.

Button has been in talks with Jaguar and Toyota, but Watson has warned Button he is still too young to carry the responsibility of spearheading the British-based team's attempt to become a major Formula One force.

"Ideally, Jenson should not join Jaguar," said Watson.

"If he does, he would be committing himself to a three-year programme. He is not mature enough as a driver to carry that level of responsibility, certainly not as a team leader."

Watson insists he is yet to be convinced of Button's true potential and believes the Frome-born driver has to show more `fire in the belly' during races.

But Britain's 1996 world champion Damon Hill is convinced that Button has the potential to emulate his track success and has told Renault they will be making a mistake if he is replaced.

"If they were going to replace Jenson with a proven race winner then I could understand the move," said Hill, who won the world title in a Renault-powered Williams.

"But I cannot understand it if he is being replaced by someone who has not proven himself."

Irvine doubt

"Jenson has the potential to be a world champion. I have been very impressed with him this season and he is very conscious and serious about what he does.

"Last year was a difficult year for him but he has bounced back this season.

"He is still very young and maturing but with each year he is going to get better and better."

Jaguar boss Niki Lauda confirmed his team had been in discussions with Button on Tuesday, although he stressed that nothing had yet been confirmed.

The talks with Button have fuelled speculation that Eddie Irvine will quit the team - and possibly Formula One - when the Irishman's contract expires at the end of this season.

He is one of the highest paid drivers on the grid, paid an estimated $10m a year by the Ford-owned team, but neither the driver nor the team has made much impact on F1.