Phillips had appeared set to join Tottenham, with the Premier League club tipped to trigger a £2m release clause in his contract.
He has even been put through his medical paces by Spurs ahead of signing on the dotted line, but now the move could well fall apart.
There is a dispute over the wording of the clause and its very existence, which has led to Blackburn demanding much more than £2m.
The Ewood Park outfit are asking for £5m plus add-ons and it is claimed that Tottenham are reluctant to do business on that basis.
Spurs thought they could sign Phillips for just £2m and add-ons, but now Blackburn want £3m more than that.
The switch could collapse, leaving the highly rated defender at Blackburn.
Phillips is highly rated and has other Premier League sides beyond Tottenham keen on him, but the goalposts appear now to have shifted over just how much the teenager will cost.
