The speedy defender was set for a further month at Vicarage Road following his return from the World under-20 Championships in the UAE, where he featured for the Republic of Ireland. But, one week into the extension the call came for him to return to Spurs and he couldn't be happier about it.
He made an impressive first team debut against Charlton - in place of the suspended Stephen Carr - and has remained in the 16 since then as the team have made a positive beginning to 2004.
"Getting the call back was great," reflected Stephen at Spurs Lodge. "Coming back, being involved with the squad and getting my debut was amazing. I've since remained involved by being on the bench and it has been really good for me.
"I got back from the World Youth Championship and had agreed to stay at Watford for another month. I played on the Saturday then, on the Wednesday, we were out doing hospital visits when I got the call to come back in time for the Boxing Day game. It was frantic, I just wanted to get my boots and get back training with Tottenham.
"It was a while since I had been back here - it was nearly a year I was away from the club," added the 20-year-old who, last year, turned out for Southend, QPR and Watford. Add in Spurs on December 28 and Stephen played in four divisions in 2003.
"I heard something like that but didn't realise straight away! Division One was a great experience for me, playing against better players. When I first went there we were near the bottom and then hit a good patch and got out of the bottom three. I really enjoyed my time there, it was great football and a great team."
While the final outcome of his debut against Charlton was a disappointing one, Stephen impressed at right-back and described the occasion as a 'dream come true'.
"It would have been nice to have got a win, but it was a dream come true. I'd been sitting in the stands for three or four years itching for a chance to get on the pitch - it is all you want to do.
"I wanted to go out there, show what I can do and hopefully get the people behind me. Now, staying in the squad and getting in the 16 has been really good for me."
Stephen Kelly has relished his involvement with the first team squad since making his return from a loan spell at Watford in late December.