The British actress sparked rumours of a romance with Craig - one of the models who appeared in her latest shoot for the British fashion house - after she was seen out in London with him earlier this month.
Watson further fuelled speculation by spending time with Craig, who also fronts rock band One Night Only, at legendary U.K. music festival Glastonbury earlier this week (21Jun10).
And in an interview with Jo Whiley from Britain's Radio 1 during the music event, Watson confirmed she is dating Craig.
When asked what their celebrity dating nickname would be, she replied, "We haven't (heard one yet). 'Watage'? It wouldn't really (work)."
Whiley then asked the 20 year old, "Have you been together ages or is it new?" to which Watson laughed: "You go George!" before adding, "We've been friends since the Burberry shoot.
