In radical moves to safeguard the future of the sport, the FIA's World Motor Sport Council (WMSC) today agreed on an optional budget cap for F1 teams, which will see outfits availing of the cap be offered greater technical freedom on car and engine design and development compared to teams who do not avail of the cap. Participating teams will be strictly limited to £30m per season, and although the finer details are yet to be announced, they will be given almost total freedom on car design while being exempt from the engine freeze.

The bombshell was dropped on teams despite the Formula One Teams Association's (FOTA) efforts to dramatically bring down the cost of competing in the sport. Measures already agreed upon for 2009 and 2010 will see potential budget reductions in excess of 50%, but the FIA has taken it upon themselves to offer an even cheaper alternative to teams as they look to entice new teams to the sport and retain the current grid of 20 cars.

Included in the £30m budget will be all team expenditure, except motorhome costs and fines as issued by the FIA. Driver and team principal salaries, engine development, car R&D and all other types of costs will have to come from the £30m. Components supplied for free or subsidised by a team supplier will also have to be accounted for by their full market value and taken from the £30m, in order to offer teams a total level playing field.

As regards general car development, the 'budget teams' will be able to avail of a different, albeit standard, underbody for their cars, while having freedom on things like moveable wings, car updates, testing, materials, simulators and wind tunnels, including all recent cost-saving measures introduced. However, measures to save money during race weekends, such as a race refulling ban and Saturday parc ferme regulations will be applicable.

Turning to the team's engine, the current rev limit of 18,000 rpm will be lifted for the budget teams, as will the engine freeze, meaning teams will be allowed to develop their engines at will, but such a development budget will have to come from the £30m budget.

Speaking in an interview following today's announcement, the FIA President Max Mosley hoped that the new regulations would encourage innovative engineering. “Keith Duckworth once said "an engineer is someone who can do for one dollar what any idiot can do for a hundred dollars",” said Mosley. “These rules will encourage clever engineering – success will come to the teams with the best ideas, not only the teams with the most money.”

Mosley also denied that the budget teams would have a distinct advantage by having freedom on development, saying that the FIA will alter the rules when needed in order to prevent this from happening. “No, we will make sure these advantages do no more than balance the disadvantages the cost-capped teams will have because of their very restricted budgets,” assured the Briton. “As said, we will balance the median performances by adjusting the cost-capped cars should this prove necessary.”

“We will have a catch-all clause for the cost-capped teams enabling us to stop anything which goes against the spirit of the cost cap and allow us to rule definitively on any unforeseen problem,” confirmed Mosley.