Mosley had described recent team talks as "very constructive"

FIA president Max Mosley and the teams failed to agree a cost-cutting plan, prompting the FIA to take action.

The FIA said in a statement: "We are reviewing the draft 2008 regulations to eliminate unnecessary expenditure.

"New teams intending to enter in 2008 have made it clear that they can do so only if costs are greatly reduced."

Mosley and the teams are agreed that the sport cannot sustain its current level of expenditure.

But just how to cut costs while ensuring safety, technological and entertainment standards remain high has been a major sticking point.

A 2008 Formula One World Championship will have 12 teams, 24 cars and greater public interest than ever An FIA statemen

Ferrari, Jordan and Red Bull have already committed their future to the sport beyond 2007.

And the FIA wants to snuff out the threat of a breakaway competition from the remaining teams and increase the participation from 10 manufacturers to 12.

Thrashing out an agreement for the future of the sport has been hampered by disputes over safety issues, rules and regulations and profit-sharing.

But now the FIA believes it is moving closer to a long-term plan to replace the existing secret Concorde Agreement, which governs the sport.

"The FIA is now confident that it will shortly be able to publish rules for the 2008 Formula One World Championship which give realistic budgets, close racing and interesting but relevant technology," the statement added.

"The result will be a 2008 Formula One World Championship with 12 teams, 24 cars and greater public interest than ever.