The Cods have a shortlist of eight candidates to replace Alan Buckley, who was sacked after a dismal start to the season.
After losing at home to Barnet on Saturday, they are 21st in the League Two table without a win to their name after eight games.
They are only off the bottom spot as Rotherham United, Bournemouth and Luton Town all started the campaign with points deductions.
The club have decided Watkiss will not be considered for the job, and as the Cods aee hoping for a swift appointment it could be his replacement in charge for next Tuesday's Johnstone's Paint Trophy game at Glanford Park.