The teams’ association FOTA said BMW-Sauber, Brawn, Ferrari, McLaren, Red Bull, Renault, Toro Rosso and Toyota were united in a decision that would split the sport in two if carried through.

"The teams cannot continue to compromise on the fundamental values of the sport and have declined to alter their original conditional entries to the 2010 world championship," FOTA said in a statement.

"These teams therefore have no alternative other than to commence the preparation for a new championship which reflects the values of its participants and partners."

The governing International Automobile Federation (FIA) had set a Friday deadline for teams to make their entries unconditional or risk exclusion in favour of would-be new competitors.  The body expressed disappointment but no surprise at the development and refused to back down: "The FIA cannot permit a financial arms race in the Championship nor can (it) allow FOTA to dictate the rules of Formula One."

The eight FOTA teams had submitted entries conditional on the 2010 rules, which include a controversial budget cap, being rewritten and the signing of a new commercial agreement governing the sport.  Attempts by both sides to reach a compromise failed, with the FIA accusing teams earlier in the week of wanting to take over the sport.
Team bosses said the ball was now in FIA president Max Mosley's court, with commercial supremo Bernie Ecclestone also having a major role to play if the split was to be avoided.

"It may well be that Max Mosley has to go," triple world champion Jackie Stewart told Reuters.  FOTA said their new series would encourage more entrants, listen to the wishes of fans and have transparent governance.

Former champions Williams and Force India have already committed unconditionally to FIA's world championship along with three new entrants -- Campos, US F1 and Manor -- who have yet to build any Grand Prix cars.  The FIA has put another group of applicants on hold pending the outcome of talks with existing teams although some of them, including chassis maker Lola, have since withdrawn.

Meanwhile, FIA said it would take legal proceedings against champions Ferrari and other teams planning a breakaway series.  "The actions of FOTA as a whole, and Ferrari in particular, amount to serious violations of law including wilful interference with contractual relations, direct breaches of Ferrari's legal obligations and a grave violation of competition law. The FIA will be issuing legal proceedings without delay."

Mallya saddened

Force India are saddened by the prospect of Formula One splitting in two and will wait to see how the situation develops, owner Vijay Mallya said on Friday.

"Last night I was notified by FOTA about their decision, We find this to be very sad and disappointing,” said Mallya.