Formula One plan for expansion

Formula One seems determined to bite the bullet on costs while increasing its grid numbers from a sparse 20 to a maximum of 26 cars.

The bold measures were taken this week by the FIA's World Motor Sports Council in Paris. The council agreed in March to an optional £30million cap, but has now increased that ceiling by a further £10million, also announcing a new costs commission to monitor the spending.

But some teams, among them McLaren and Williams, are unhappy with the prospect of a two-tier series with some teams operating under the cap and others perhaps prepared to spend the money while taking technical penalties. Frank Williams supports the idea of a budget cap but not having the choice of one of two sets of regulations.

The introduction of the optional budget cap is intended to encourage new entrants. It's been 15 years - back when the sport was at its healthiest - since 26 cars have been on an F1 starting grid. The FIA is also concerned it may lose more manufacturer backed teams in this threatening economic climate.

The FIA believes that at £40million that 70 per cent of the grid can generate a profit. This transforms the business case for owning a Formula One team, for both manufacturers and private investors. The desired net result is to have a very healthy commercial environment for present and new owners.

"We also had a good look at costs, and believe that £40million in combination with greater technical freedom will allow engineers to create F1 cars even more interesting and exciting than today's cars," an FIA spokesman said.

Any team agreeing to operate within the budget cap will be able to use movable front and rear wings and, most crucially, an engine not subject to a rev limit. Unlimited off-season testing will also be allowed, along with unlimited wind-tunnel testing.

The additional £10 million gives current teams some latitude though it falls way short of the budget levels they're accustomed to - around half a billion dollars in the case of Toyota, Ferrari, BMW and McLaren-Mercedes.

These teams have to decide whether to operate under the budget cap - and get the engineering freedoms - or ignore the ceiling and wear technical restrictions.

Commercial rights holder Bernie Ecclestone is prepared to offer generous incentives to the new teams.

These include an annual payment of US$10million to each team, plus free transportation of two chassis, freight up to 10,000kg in weight, and 20 economy-class tickets for each race outside Europe.

The WMSC has also confirmed a ban on refuelling during races, to save on costs of transporting refuelling rigs, as well as giving engine builders a greater incentive to improve fuel economy. Tyre warmers have also been banned.

Several organisations have shown early interest in entering (or returning to) F1 next season. These include Aston Martin, USGP, Lola and GP2 squad iSport.