Speedo enjoyed great brand awareness during the Beijing Games as its highest-profile ambassador stormed to eight Gold medals.
Yesterday Phelps was defeated by by Paul Biedermann of Germany, his first loss in a major championships in nearly four years.
The suit worn by Biedermann, an Arena X-Glid polyurethane suit will be banned in early 2010 - far later than expected - while Phelps is contractually obliged to wear the Speedo LZR Racer suit.
Biedermann himself admitted the suit gave him a distinct advantage and said he hoped to beat Phelps next year without any edge.
The sport's world governing body, FINA, met earlier this week to set new rules on future swimsuits regarding their shape and materials.
However, Phelp's swimming coach Bob Bowman is so infuriated that he is threatening to pull the star athlete from major competition until the situation is resolved once and for all.
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