Graham Barrett is rejecting a permanent move to Preston to remain on loan with Albion.
Boss Steve Coppell confirmed today: "His agent phoned me last night and said he is going to stay."
The Argus morning edition revealed on-loan Arsenal striker Barrett was poised to turn down Preston's offer of a three-and-a-half year contract.
The Seagulls' other loan signing from Arsenal, Steve Sidwell, signed a deal of the same length in completing a £300,000 transfer package to Reading yesterday.
Coppell is hoping Republic of Ireland international Barrett will now knuckle down to the task of helping Albion retain their First Division status after scoring once in 14 starts for the club.
"I think the whole thing has been unsettling for him," Coppell said. "Now he has got to get down to the business of representing Brighton and scoring goals. That is what he will be judged on between now and the end of the season.
"Indirectly he has put his faith in scoring goals for Brighton. His contract is up at Arsenal in the summer, so the only way he can impress them or potential bidders is by scoring goals."
Coppell is still keen to sign somebody of Sidwell's ilk after missing out on Birmingham's Curtis Woodhouse. The former Sheffield United utility player rejected an opportunity to join Albion on loan for three months.
"It's a shame because he is a bundle of energy and it would have been a nice boost for us at this time," said Coppell.
"I just think at the moment we need options. With the games coming up and the importance of them I just didn't want to be vulnerable and exposed.
"We are bottom of the table, so I would be interested in taking anyone who can improve us, but it is still very important to get the right person in. A player that comes here has got to fit in and have the mentality of fighting and scrapping.
"Inevitably the ones who contribute the most are on the fringes of the first team squad at Premiership clubs. Most of them have gone now, so we have got to bide our time until somebody does become available."
Albion are not back in action until the visit to relegation rivals Walsall on Saturday week.
Coppell was hoping to arrange a friendly against League opposition for Friday to keep the players ticking over, but he has been frustrated so far. He said: "I wouldn't have minded if we could have had good training, but yesterday it was ankle deep in water and the forecast for the next couple of days is the same."
Daniel Marney has agreed to a second month's loan at Southend.
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