There is renewed speculation Phelan will lose his job, or have it rejigged, after four seasons and a record of just 14 wins in 77 games.
Otago United chairman Dave Lamont confirmed Phelan would remain in a position within the franchise's coaching structure but declined to confirm the nature of his role.
That indicates United recognises the value of the former Irish international but is tempted to shake up the coaching structure in a bid to get better results.
Phelan, who is currently overseas, has settled in Dunedin with his family and worked hard to get the Otago franchise to perform in the New Zealand Football Championship.
But the record of the team under the former Wimbledon, Manchester City, Chelsea and Everton defender suggests it could be time for a change.
Otago United played reasonably well in 2005-06, Phelan's first season, winning seven and drawing six of its 21 games to finish fifth in the eight-team league.
But it has been all downhill since then, with United finishing seventh in 2007-08 (two wins and six draws from 21 games) and 2008-09 (two wins and two draws from 14 games) and bottom in 2006-07 (two wins and six draws from 21 games).
Otago has fielded an undersized team in comparison with the NZFC heavyweights and the franchise has not been able to attract enough quality imports to fit in around the best local players.
The main local contenders for the job if Phelan was replaced would presumably be his assistant, Malcolm Fleming, Dunedin Technical coach Mike Fridge, long-serving Caversham coach Steve Fleming and Otago Youth coach Neil Mackenzie.
Meanwhile, the weekend of July 25-26 is looming as a big one for Otago football with both Caversham (Chatham Cup) and Roslyn-Wakari (women's knockout) having home cup ties.
Caversham, which beat Dunedin Technical 3-0 in the fourth round at the weekend, has been drawn to play Auckland's Three Kings United.
Three Kings United plays in the second-tier Northern First Division but has recruited heavily to build a squad to aim for promotion to the Northern Premier League.
There is a clash between powerhouses in Wellington, where Miramar Rangers hosts Waitakere City.
Both clubs have won the Chatham Cup three times.
Wellington Olympic travels to North Harbour to play Forrest Hill Milford, while Nelson Suburbs heads to Auckland to meet Manurewa.
In the women's knockout cup, Roslyn-Wakari hosts Western (Christchurch) in the southern region final.
Other quarterfinals are between Pukekohe and Claudelands Rovers (Hamilton), Glenfield Rovers (North Shore) and either Three Kings or Lynn Avon, and Waterside-Karori and Upper Hutt.
The semifinals for both competitions will be played on the weekend of August 29-30 with the finals at North Harbour Stadium on September 19.
