Claudio Ranieri insists Leicester City will not panic after a 2-1 defeat at Watford left the struggling Premier League champions just two points clear of the relegation zone.

The Foxes were two goals behind within 12 minutes at Vicarage Road on Saturday after conceding to Etienne Capoue and Roberto Pereyra, before they hit back through Riyad Mahrez's penalty.

Leicester, though, could not force an equaliser, with Ranieri offering no excuses after the game and choosing instead to praise his side's spirit.

"We reacted well at 2-0, but Watford defended well with experience," he was quoted as saying by the club's Twitter account. "We shot a lot, but we didn't create a good chance.

"The referee got the penalty decisions right. Their two goals made the match. We did our best and our spirit was good.

"We lost, but I'm positive about the spirit. We have to concentrate more early in the games, but they were fantastic goals.

"Our position is not good, but with this spirit I am calm and confident with my players."

Watford manager Walter Mazzarri, meanwhile, was pleased with the style of play he saw from his side as they retained a place in the top half.

"We got the win and I'm very happy," he was quoted as saying by BBC Sport. "We played the football that I like my team to play and this time we were good enough to score.

"The way Roberto Pereyra played, not just the goal he scored, he ran the whole game and I am very happy with him."