The club has said the money behind a reported £20m (€23m) package is linked to an unidentified Irish consortium.
Doncaster’s chairman, John Ryan, had approached Mr Phelan in June to find investors to fund its attempt to get promotion to the Premier League.
The bid is being channelled through a London-based equity firm which is investing money to archive documents and recordings which it got from Mr Phelan. He was recently declared bankrupt in Northern Ireland.
The tapes and documents were secretly gathered during Mr Phelan’s time working on separate projects for Michael Lowry and Denis O’Brien. The archive includes the taped telephone call controversially released this year, along with other material that was not made available to the Moriarty Tribunal.
Doncaster Rovers was the centre of a lengthy tribunal inquiry after allegations Mr O’Brien had invested in the club as a means of conferr-ing benefit onto Mr Lowry.
Mr O’Brien bought the club in 1998 but, shortly afterwards, sold the sporting side to facilitate his property development plans.
Mr Phelan was the original scout and project manager for this attempt to redevelop Doncaster Rovers’ former stadium. There is no suggestion Mr O’Brien is involved in the current bid for the club.
Doncaster’s current chairman, John Ryan, said it has been in advanced negotiations to sell up to a consortium represented by Mr Phelan.
The bid was tabled by Sequentia Capital, an offshoot of equity firm Pavillion Capital Partners.
In late July a contract was agreed with Seq-uentia but the deal hit a setback this week after one of the club’s largest shareholders expressed reservations.
A statement was issued by Mr Phelan on behalf of Sequentia. “Mr Phelan presented a proposal to Sequentia Capital SA [investor] and it was decided to proceed,” it said.
It recently emerged that Pavillion had secured possession of the taped conversations in which Mr Phelan and Mr Lowry discussed a previously unknown £248,000 settlement between the pair in 2002.