Watts plays the late British royal in upcoming movie Diana, which focuses on the last two years of the Princess' life before she died in a car crash in Paris, France in 1997.
Blunt, who was rumoured to have turned down the Diana role, is now said to be in talks to play the royal in another project, based on the memoirs of Diana's former bodyguard Ken Wharfe, reported Contactmusic.
The movie adaptation of 'Diana: Closely Guarded Secret' is being developed by producer Stephen Evans, the brains behind 1994 royal drama 'The Madness of King George'.