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.
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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.