The 22-year-old striker, who scored 15 goals in 35 appearances last season, has performed a U-turn after initially intimating that he would be keen to remain at New Douglas Park. The Glasgow-born player spent the first half of the 2012/13 campaign on loan at Hamilton before signing a one-year deal last summer, following his release by Celtic.
Neil is keen to keep his promotion-winning squad intact and is disappointed that Keatings is heading for the exit door. "We offered James a contract but he has decided to knock it back," said Neil.
"It's a bit of a surprise, because I had spoken to James and we had agreed that he would re-sign. It was only going to be a short-term deal and he's looking for a bit more security as he has a young family. I've heard that Hearts are interested in him. I would be disappointed to lose him as I think there is more to come from him. I said I would be happy if I managed to keep the squad together and James is part of that. I don't begrudge James at all, though."