Mosley (left) and Ecclestone held positive talks in China

The president of the sport's governing body, the FIA, held more discussions in China to plan for F1 after the ruling Concorde Agreement expires in 2006.

Five manufacturers have threatened to form a breakaway series but Mosley is now optimistic that could be avoided.

Mosley said: "There is a lot of progress being made and I think it's all going to end up quite peaceful."

The future of F1 has been under scrutiny for some time, with Mercedes, BMW, Renault, Honda and Toyota reluctant to compete under Mosley's rule beyond 2007.

The manufacturers also want the sport's profits to be more fairly distributed between the teams and commercial rights holder Bernie Ecclestone.

The talks were very positive and I don't see difficulties in the future FIA president Max Mosley

Ongoing arguments between the FIA, Mosley and Ecclestone have also centred on safety, rule changes and cost-cutting measures.

But Mosley is now confident the affair is nearing a positive conclusion and that a new ruling document will be agreed soon.

However, the FIA president remained reluctant to reveal the details of the talks and cancelled a planned media conference in case it jeopardised the progress made.

"I don't want to prejudice those discussions by talking too much about what's going on in public because there has been a lot of movement," said Mosley.

"From our point of view the talks were very positive and I don't see difficulties in the future."