Phillips has been linked with a big-money move to the Ospreys

Media reports have suggested that the Wales scrum-half has agreed a �180,000 per annum contract to join the west Glamorgan region next season.

"The pay structure we have established must not be compromised," said Blues chief executive Robert Norster.

If Phillips moves, Justin Marshall's Ospreys future will be questioned.

The ex-All Blacks scrum-half is under contract until the summer of 2008 following a move from Leeds at the end of last season.

It's a professional sport, careers are short and players have to cash in Ex-Cardiff and Wales scrum-half Terry Homes

The Ospreys' other Kiwi scrum-half, Jason Spice, is out of contract at the end of this season, and he has been linked with a possible move to the Blues.

Phillips moved to the Arms Park from Llanelli Scarlets at the end of the 2004/5 season as he was tired of playing second fiddle to Dwayne Peel.

The 24-year-old, who would have won more than his 18 caps but for Peel's outstanding Wales form, will be out of contract in the summer.

Cardiff, Wales and Lions scrum-half legend Terry Holmes says that Phillips would be a fool not to move to the Ospreys, if rumours of the salary he has been offered prove to be true.

"It's a professional sport, careers are short and players have to cash in," said Holmes.

The thought of one Welsh region gazumping another may not please the Welsh Rugby Union, and Norster - in a statement on the Blues website - insists that his side will not be drawn into bidding wars.

We have to work within the wider marketplace and not an artificially driven internal one Blues chief executive Robert Norster

"Under the terms of all existing player contracts, we continue to hold an exclusive option to renew existing player's futures up until the end of February," said Norster.

"We naturally desire to retain our quality players and provide them with packages commensurate with their market value.

"It is obvious that in all such negotiations market forces will ultimately prevail.

"Consequently, we continue to operate under the financial parameters of the wider game, particularly those within the UK and Ireland.

"We recognise that players need to maximise their short careers, but we have to work within that wider marketplace and not an artificially driven internal one.