The marketability of record-breaking Olympic swimmer Michael Phelps could suffer after a British newspaper published a photograph purportedly showing him smoking marijuana.

While some major sponsors such as Speedo and Omega said they had no plans to pull Phelps from their campaigns, analysts said the news had tarnished the image of the 23-year-old and may cost him some marketing dollars going forward.

The News of the World ran a picture of Phelps with a glass pipe, saying it was taken at a student party at the University of South Carolina in Columbia last November. The newspaper did not say Phelps was smoking marijuana, but said the glass pipe the swimmer was photographed with was generally used to smoke the drug.

Phelps, who has won more Olympic gold medals than anyone else after his eight at the Beijing Olympics last year, apologized for his "regrettable" and "inappropriate" behaviour.

"It is absolutely damaged by this," Robert Boland, professor of sports management at New York University, said of Phelps' marketability.

"Given the economy, a lot of companies have pulled back on sports marketing deals."

While Phelps' agency, Octagon, said it has been in touch with his sponsors and none have indicated any intention of opting out of their deals, analysts noted this was not the swimmer's first transgression.

In 2004, a few months after winning six gold and two silver medals at the Athens Olympics, Phelps, then 19, pleaded guilty to a drink-driving charge.

"This will make advertisers or sponsors very cautious," said Tony Ponturo, chief executive of Ponturo Management Group in New York and former head of Anheuser-Busch's global media and sports marketing division.

"If you want the sponsorship dollars, then you have to understand you're under a very bright spotlight."

Phelps has signed several endorsement deals worth millions of dollars. Ponturo said typical endorsement agreements include "morals clauses" that allow sponsors to terminate deals early if they feel the athlete has behaved poorly in public.

Last August, the swimmer reportedly was earning about $5 million a year from endorsements, but Octagon declined to comment on that figure.

Speedo paid Phelps, who has never failed a doping test, a $1 million bonus for breaking Mark Spitz's record of seven gold medals at Munich in 1972.

Phelps, who plans to make the 2012 Summer Games in London his final Olympics, has said he would use the bonus to start a foundation.