Having finished their first season back in the Premier League in ninth, there was hope among the Whites faithful that they would be able to push for a European spot this term.
However, Leeds have had a tough start to their top flight campaign this season and are currently 17th in the league.
Leeds’ hierarchy are still convinced they can take the club to the next level and have been securing the futures of key players with new long-term contracts, having extended Patrick Bamford’s stint recently on improved terms.
Phillips is another key player locked in negotiations with Leeds over signing a new deal, but they are yet to come to terms with him.
The 25-year-old’s stock in the Premier League and at international level has risen since he made his top flight debut and he needs to be convinced of Leeds’ ambitions to commit to a new deal at the club.
Leeds are also understood to be some way away from matching Phillips’ wage demands, with the midfielder currently earning £35,000 a week.
Phillips has not indicated that he wants to leave Elland Road in the near future and it remains to be seen whether there will be a breakthrough in contract negotiations soon.