He says everyone at training has made light of the situation, revealing: "It is quite a joke, really, he jokes about things and the lads joke about him putting a red shirt on - it is a tongue in cheek thing with all the boys.
"We are all aware of the situation and the sooner it is resolved the better - you would hope something is sorted out.
"We all want him to stay because he is a very, very talented player, but the situation is that the best club in the country have shown an interest in him and that is something that can't be ignored.
"But we can't do any more than act upon what Manchester United do and everyone is a little bit 'wait and see what happens'.
"These things normally get sorted out very quickly once they happen, but you just don't know what options Manchester United have. Everyone keeps saying that they have got their end of the month deadline for Europe, but the only person to speak to is Mr. Ferguson.
"Paolo is a very professional person, though, and if Glenn decides to play him he will be at his best.
"His hamstring hampered him a little bit but he has come back okay, he keeps fit and agile anyway."
Whatever happens with Paolo, Paul feels that Jermain Defoe will play a pivotal role in the rest of the campaign, and he adds: "I think Jermain Defoe is going to play a major part in the rest of the season, whether it is from the subs' bench or starting - he will be a major factor.
"In the first half a dozen games he was getting a little bit frustrated because he wasn't getting on, but we must remember he is still only 19.
"Jermain popping up last week and scoring twice was a lovely boost, and he is getting better and better, which is a credit to him.
"But Leeds away was very tough for him to play in and we are mindful that we have to bed him in, but the young man scores goals, and we're grateful for that."
Fellow striker Fredi Kanoute returns from illness, and Paul adds: "Fredi has been training like Paolo and they are both up for selection. Fredi needs to get playing regularly to get fit, and he is working hard on his hamstrings.
"Training has been good this week whereas we have had quite a lot of weeks recently where the weather wasn't too good, so we've been able to work a bit more and get some good coaching in."
As for the win over Macclesfield, Paul says: "They are always difficult games. As soon as you are out of the hat you know you are on a hiding to nothing and the BBC obviously thought we might slip up.
"It's funny because when it came out and the lads said: 'oh no, it is another lower league side in the FA Cup', I said: "I didn't want to tell you but I have never been involved in a big shock in the FA Cup'.
"They were a bit miffed, but once we got our heads round it, it was fine.
"For a side near the lower end of that division I thought they put up a good fight and a credible performance but everybody did a good job, and the key to it was scoring just before half time when we were under a little bit of pressure."
As for Saturday, he says: "I'm sure it will be a very tough game but we have got to be confident. We are at home, but we know they are going to be a very forceful side, and we have got to combat that and play our football as well."
Paul is delighted that Vladimir Labant has completed his £900,000 signing for West Ham and he says: "The squad has been very thin and Glenn has been trying to add some quality to it for some time.
"They are brought up in a tough way in that part of the world. The climate is not fantastic but they are very dedicated people and I'm sure he will be a good acquisition for us."
Vladimir is included in the squad to face Leicester City, who give a debut to Jacob Laursen, whom they signed this week from FC Copenhagen.
Squad: James, Andersson, Hislop, Schemmel, Repka, Dailly, Winterburn, Foxe, Minto, Moncur, Di Canio, Kanoute, Hutchison, Labant, Cole, Sinclair, Defoe, Kitson, Courtois, Potts, Garcia.