Swift was part of the GB team at the world road championships
Confusion surrounds Team Sky's line-up for its debut at the Tour Down Under in January after they named a rider apparently signed to another team.
Ben Swift has been named in the British team's seven-rider line-up despite the 22-year-old's Russian team Katusha saying he has a year of his deal left.
"Our understanding was he had become a free agent. It was planning ahead," said Team Sky chief Dave Brailsford.
"The information we received is that he'd quit and terminated his contract."
Swift and his representatives argue his Katusha contract can be broken because of a change in the terms and conditions earlier this year.
However, the Russian team are keen to keep a rider who impressed in winning a stage at the Tour of Britain.
A spokesman told Cyclingnews: "Ben Swift will ride for Katusha until the end of 2010.
"He signed a regular contract with us and he has to respect it."
Brailsford, though, insisted the team had done nothing untoward and had acted entirely in good faith.
"The situation regarding Ben is in the process of being resolved," he said.
"As a team we haven't actually been directly involved with regards his current team - that's him acting independently with his agent.
"Were he to become a free agent - as we were led to believe - then in our pre-planning we have foreseen a situation where Ben, were he a Team Sky rider, would compete in the Tour Down Under.
"However, we respect the fact that there is an element of speculation."
Chris Froome and Russell Downing are the two other Britons in the Sky line-up, along with Australian pair Chris Sutton and Mathew Hayman, Italy's Davide Vigano and Greg Henderson of New Zealand.
Team Sky is the new team put together by British Cycling performance director Brailsford, and it will make its first competitive appearance at the race in Adelaide and South Australia from 17-24 January.
Lance Armstrong's Team RadioShack will also make its first appearance in the same event.
Triple Olympic gold medallist Bradley Wiggins had shown great interest in joining Team Sky but has been told by his American team Garmin-Slipstream that he must see out the final year of his contract.