Yorkshire are to hold talks with Adil Rashid's agent about the spinner's future, says director of coaching Martyn Moxon.
This week England named Rashid in their first-Test squad to face India, despite the 30-year-old signing a deal to play only white-ball cricket with Yorkshire.
"We offered him a one-day contract for next year," said Moxon.
"Now [England selector] Ed Smith says any player who is going to play Test cricket has to have a red-ball deal."
Speaking to BBC Radio 5 live's Sportsweek programme, Moxon added: "We have to work out how we are going to square that circle."
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Rashid has taken 38 wickets at an average of 42.78 in 10 Tests for England, the most recent of which was in India in December 2016.
In February, he signed a contract with Yorkshire to play only limited-overs cricket in 2018. He has not played a first-class match since September 2017.
"It's a crazy situation that we are employing him to play white-ball cricket and he can't play that for us in important [T20 games] games because he is now playing red-ball cricket, which he has not wanted to play," said Moxon.
Asked if he thought Rashid had played his last game for Yorkshire, Moxon said: "I hope not.
"As I said to him, we will sit down with his agent and discuss the future going forward. Adil has certainly got value to us.
"The problem we've got is that we have been put in a difficult situation. Only recently Adil told us again that he didn't want to be considered for red-ball cricket next year [so] we've been thinking about our squad with that in mind.
"We have to talk about how we manage that situation. The plans we have got in place might change slightly now.
"That's one of the things that I'm disappointed in Ed Smith - that he hasn't thought through the consequences of the selection."
Rashid made his first-class debut for Yorkshire against Warwickshire in 2006.
He told BBC Sport last week: "My contract ends this year and they have offered a one-day deal for next year which is on the table and I have not signed.
"I have not gone anywhere, I have not thought about that but I will sit down with my dad and Martyn Moxon to see what they want.
"If it works out, great, if not then there are 16 counties out there and I hopefully I will get picked up by someone and start afresh. That is the last resort.
"If they cannot be happy with me being selected and it is causing problems, things have to be done."
The first match of the five-Test series against India starts on 1 August at Edgbaston.