Ecclestone looks to have found a way forward

The manufacturers have been fighting to secure a larger share of profits from F1 supremo Bernie Ecclestone and a group of banks.

And they announced on Thursday that a breakthrough had been reached.

"The outcome is in the best interests of Formula One and its millions of fans around the world," a spokesman said.

Manufacturers BMW, DaimlerChrysler, Fiat (Ferrari), Ford and Renault had set a year-end deadline for a deal over Formula One's future.

And the GPWC Holdings company which represents their interests has been using the threat of a rival series as its main bargaining tool.

Ford owns Jaguar and provides engines to Jordan and Minardi, while BMW is the engine partner of Williams and DaimlerChrysler owns a stake in McLaren.

Losses

A "memorandum of understanding" will now be prepared by the end of the month to determine the "future structure of Formula One", the spokesman added.

The sport's commercial rights are controlled by the holding company Slec, set up by Ecclestone.

Ecclestone's family-owned Bambino Trust owns 25% and the remainder are controlled by banks - Bayerische Landesbank, JP Morgan and Lehman Brothers - following the collapse of Germany's Kirch media company.

Ecclestone has a 100-year deal with motorsport's ruling body the FIA for commercial rights, but the current Concorde Agreement governing the sport expires in 2007.

The banks, who were owed $1.6bn by Kirch, had been holding out for a deal that limited their losses.

But the threat of a breakaway series risked leaving them, in the words of Ferrari boss Luca di Montezemolo, owning "100% of nothing".

As a result they are now believed to have agreed to sell their shares to the manufacturers.