The born and bred Blade has made some astonishing performances in his recent 6 games for the club. The right-back position has suited the defender who has been on the Blades books since the age of 9.
A so called source in The Mirror said: "City scouts have been watching Naughton on a regular basis over recent weeks, and have passed on rave reviews about him to the manager.
"Sparky (Mark Hughes) will want to take a look at the lad himself before doing anything but, if he likes what he sees and decides to make a move, then he will be in pole position because of the riches at his disposal.
"He is looking for somebody with the ability to be a top-class right-back for years to come because he sees Micah Richards as skipper Richard Dunne's long-term partner in centre defence."
Meanwhile Arsenal may be interested in the youngster. A fee between £5m - £10m has been banded around many football websites.