The Lions star has three years remaining on his £1.5million contract at the Liberty Stadium but could now join big-spending French side Toulouse.

However Howley believes ‘Gatland’s Law’ of only selecting home-based players is still in effect despite the exportation of James Hook and Lee Byrne and a call for greater clarification on the rule by Ospreys’ boss Scott Johnson.

“From a national perspective, we want as many players playing in Wales as possible,” said Howley, a key member of the national side’s backroom staff.

“We have always said if a player is 50-50 in terms of his position, and playing outside of Wales, that we will support the regions, with funding and by picking people playing in Wales.

“If you are playing here week-in, week-out, there is a chance to be seen by the selectors and we do have an element of control over a player’s fitness and conditioning.

“We don’t have that kind of control when players move to England and France.

“Obviously, there are market forces out there and in the current financial climate there is no doubt the regions cannot compete with the English and French clubs.”

Philips could be set for Toulouse following the departure of former New Zealand scrum-half Byron Kelleher, although Australian Luke Burgess is reportedly another target for the reigning European champions.

Alternatively Philips could join Gavin Henson at Toulon, but Howley admitted he has not spoken to the scrum-half.

“He is clearly unsure of his future, from the perspective of the Ospreys, but we want world-class talent like Mike to remain in Wales," he said.

“But, if a player is unhappy, or a region is unhappy, that is something between them.

“As a player, if things aren’t right off the field, it certainly affects you on the pitch.

“Mike had been disappointed with his performances during the Six Nations campaign. If this was going on at the time off the field, it may explain some of the below-par performances from him.”