Blackwell has been offered a position as Reid's number two but the United board are hoping to hold on to claim compensation.
Blackwell has stated his desire to move but is still under contract at Bramall Lane and the issue could yet go to court.
"I don't know what to do because it seems both clubs are struggling to reach a settlement,'' Blackwell told the Yorkshire Post. "Sheffield United have been good to me but I hoped common sense would prevail and it wouldn't come to this.
"But the club have threatened to slap an injunction on me so I'll have to think carefully about my position and make a decision in the next 24 hours.''