Julian Cope presents Head Heritage

Watkins didn't see anything 'supernatural/magical/mystical in his books June as far as I could see but in the link you provided Deveraux says:-

'In 1935, Watkins died. In 1936, the British occultist Dion Fortune wrote a fictional book, a novel, called The Goat-Foot God, in which she put forward the notion of 'lines of force' connecting megalithic sites such as Avebury and Stonehenge in southern England. In 1938, Arthur Lawton, a member of the Straight Track Club, wrote a paper in which he claimed that leys were lines of cosmic force which could be dowsed. He was a dowser himself, and was impressed with the German geopathological dowsing that was then getting under way, and French dowsing work which claimed that there were lines of force beneath standing stones. Lawton put all this together in his own head and came up with his theory about leys'.

So it looks like these were the first two references to it...unless someone knows differently.