Burnley put him on their short-list to replace Owen Coyle in 2010.
Yet it appears Phelan was never even told.
"I was wrapped up in what I was doing," he told Press Association Sport.
"I realised it was something special. I was working in a great environment. The facilities were fantastic and the manager let the coaches get on with it. Would I have wanted to jeopardise that?
"When I got told later on that one or two clubs were interested but I was never informed it actually added value to what I had been doing. If I hadn't been doing my job properly, I would have been on my way.
"I am very lucky. How many guys have not only played for the top football club in the country, they have coached there and been an assistant manager there? That is a dream.
"But now I am out of it, I hope those opportunities come around again."
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