Rooney is due to have talks with new boss David Moyes this week that will determine the next stage of his career. Sources close to the discussions have claimed it is presently "60-40" that the England striker will leave Old Trafford. One of the major stumbling blocks is going to be the clarification Rooney is seeking to Sir Alex Ferguson's statement last May that the former Everton man had asked for a transfer.
It has now been established Rooney did not formally request a move - as he did in 2010 - he merely wondered whether Ferguson saw any long-term future for him at the club. However, the perception of an unhappy player remains and Phelan accepts it could be an issue, telling BBC Radio Five Live: "It is a difficult one."
Phelan added: "I think you can put your first one down to inexperience maybe, the second one is putting yourself right out there. Somewhere along the line there will, I would think, be some words said, there will be some meetings, and they'll see if its still alive and worth going for or they'll call time on it."
Phelan, who lost his job as part of Moyes' backroom shake-up, is still of the opinion that Rooney should stay where he is. For in his view, there is no better place to be, despite apparent interest from Chelsea, Arsenal and Paris Saint Germain amongst others.
"He is still is at the greatest club he could be at, so why would you want to jeopardise that unless you want a fresh challenge and you don't think that challenge is being met at Manchester United," said Phelan. "He might have hit a little bit of a blip in certain performances and then it's easy to find fault with that, but he isn't the first player to do that and he won't be the last.
"You just have to nurse them through it and hopefully he responds to that little bit of nursing. But sometimes you have to crack the whip with him, because they're men, not children. You have to get as much out of them as you can and I think Wayne has responded as well as he feels he can do for Manchester United."
Although he was linked with the managerial vacancy at Wigan, after also being touted as a potential boss of home-town club Burnley last season, Phelan is still looking for his own challenge after 12 years on the first-team coaching staff at United. However, he accepts it was Moyes' right as manager to restructure the club in whatever manner he wished.
"The chat was very good, it was quite open, it was honest," said Phelan. "I had a couple of talks with him and he wasn't quite sure what he wanted to do, then we met up again a little bit later and he delivered the message that I wasn't going to be part of his team.
"Fair enough you move on. I wish him the best of luck. He's definitely going to need it because everybody needs luck and it will be a difficult job for him. But it will be a great job."