Jaguar announced on Friday morning that Newey would join them on 1 August, 2002.

But, in a move that will embarrass Jaguar, McLaren issued a statement on Friday afternoon insiting that Newey would be staying with them.

According to McLaren, Newey has signed a contract which runs until 1 August, 2005.

"McLaren and Adrian very much regret the confusion which will have been caused by the statements released earlier today," the statement read.

"Both parties are delighted to continue this successful relationship."

Newey, who is notoriously indecisive, has won two drivers' titles and one constructors' championship with McLaren. He is widely believed to be the best racing car designer in the world.

Though admitting that he had thought about a move to Jaguar to work with friend and Jaguar boss Bobby Rahal, Newey insisted: "I informed Bobby of my decision to remain at McLaren some time prior to the release issued by Jaguar.

"The mechanisms of this release made it impossible to stop and I am sorry for any embarrassment this may have caused."

Jaguar claim ownership

Jaguar, however, insist the move - which would have been one of the biggest coups in F1 history - is definite.

They say Newey has signed a contract with them.

Jaguar Racing chief executive Bobby Rahal cites his long-standing friendship with Newey as a major impetus for the move.

"We go back many years to our days together in Indycars and our friendship has certainly played a key role in making this happen," he said.

Compensation?

Jaguar spokesman Nav Sidhu is equally confident of the move, insisting: "At this stage we have done nothing wrong. He's signed a contract and that's all there is to it."

Niki Lauda - chief of Ford's premier automotive group, which helps run the Jaguar formula one team - said: "First of all, Jaguar signed Adrian Newey on Tuesday evening to a binding contract.

"If McLaren have also signed a contract with him then I shall be interested to see how he is going to design two separate F1 cars for different teams from 2002.

"Ron [Dennis, McLaren boss] can jump up and down all he likes. We didn't steal Newey away from him, we did a deal for when his contract ends in 2002."

The tug-of-war over Newey could spark a legal battle between the teams.

However, it is unlikely that Jaguar will be able to force Newey to work with them if he has finally decided to stay at McLaren.

More likely is that McLaren and their engine partner Mercedes will have to pay compensation to Jaguar.