Not a Rosy prospect for the man asleep on watch (3,7)

I believe the answer is:

bad lookout

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'not a rosy prospect for' is the definition.
I don't know anything about this answer so I can't tell whether it can be defined by this definition.

'man asleep on watch' is the wordplay.
'man asleep' becomes 'bad' (I can't justify this - if you can you should give a lot more credence to this answer).
'on' means one lot of letters go next to another.
'watch' becomes 'lookout' (synonyms).
'bad'+'lookout'='BAD LOOKOUT'

'the' is the link.

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I've seen this clue in the Evening Standard.

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