Townsend has opted not to include the Stirling-born openside in his matchday squad for Saturday’s final Test match of the year against Argentina at BT Murrayfield.
Graham, son of 25-times capped former Scotland prop George, began the year as part of England’s extended Six Nations training squad but never featured for Eddie Jones’s side.
When Townsend named his initial 40-man squad for the November series he indicated that his impression was that Graham had still set his sights on an England cap. However, he then called him into the Scotland squad for the South Africa match following an injury to Scarlets flanker Blade Thomson.
“Gary’s trained with us for two weeks and it’s been great having him here,” said Townsend, who has made nine changes from the team who lost 26-20 to the Springboks last Saturday, including a move to start Adam Hastings at stand-off, with Finn Russell outside him at inside centre.
“This weekend was more beneficial for him and for us to see what he could do. The first week obviously when you come in and you’ve not been part of the squad, there’s a lot to learn and Gary did well to get his head down and work hard.
“This week in training you see him more involved in our game and that’s been great to see.. The timing hasn’t been great for him in terms of being involved this weekend, more so from the point of view of his injuries, so he’s only back into playing now. But he’s a player we rate very highly.
“We obviously were disappointed in the Six Nations that Eddie got in there before us, because he was in great form and if he gets back into that form, which he showed in the second half of his game against Harlequins at the weekend, then he’s going to compete really hard in two positions; at seven and at six.”
Townsend said he was confident that if England coach Jones was mischievously minded to test Graham’s loyalty again he would be rebuffed.
“No, Gary’s committed to us and he’s enjoyed these two weeks and we’ve been impressed with him,” said the coach. “He now has to go back to Newcastle and over the next six weeks show through his form why he should start or be involved in the 23 against Italy [in Scotland’s Six Nations opener on 2 February].”
Townsend hinted that there could be potential comeback to Test rugby for Hardie, who has signed for Newcastle following his Edinburgh contract not being renewed in the wake of a suspension for gross misconduct last year.
“Last week at Newcastle Gary was at six and John Hardie was at seven, so it’s encouraging for Scotland to have two back-rowers playing at [English] Premiership level,” said Townsend. “John obviously has missed a lot of rugby, but that’s now his first start, his third game after two off the bench, so there’s another guy competing for a seven role.”