Formula One Teams Association (FOTA), representing eight of F1's major teams, frustrated by deadlocked talks with F1 boss Max "tea-bag" Mosley (pictured), carried out their threat to break away from Formula One and create their own championship series in 2010.
The eight teams, Brawn GP, Ferrari, McLaren, Renault, Toyota, BMW Sauber, Red Bull Racing and Toro Rosso announced their decision following a four-hour meeting tonight ahead of this weekend's British Grand Prix at Silverstone.
FOTA has been frustrated by deadlocked talks with Mosley over his controversial attempt to introduce a voluntary £40m budget cap for teams to curtail a "financial arms race" in F1. Below is the FOTA statement:
Since the formation of Fota last September the teams have worked together and sought to engage the FIA and commercial rights holder (Bernie Ecclestone), to develop and improve the sport."
"Unprecedented worldwide financial turmoil has inevitably placed great challenges before the F1 community.
"Fota is proud that it has achieved the most substantial measures to reduce costs in the history of our sport.
"In particular, the manufacturer teams have provided assistance to the independent teams, a number of which would probably not be in the sport today without the Fota initiatives.
"The Fota teams have further agreed upon a substantial voluntary cost reduction that provides a sustainable model for the future.
"Following these efforts, all the teams have confirmed to the FIA and the commercial rights holder that they are willing to commit until the end of 2012.
"The FIA and the commercial rights holder have campaigned to divide Fota.
"The wishes of the majority of the teams are ignored. Furthermore, tens of millions of dollars have been withheld from many teams by the commercial rights holder, going back as far as 2006.
"Despite this, and the uncompromising environment, Fota has genuinely sought compromise.
"It has become clear, however, the teams cannot continue to compromise on the fundamental values of the sport and have declined to alter their original conditional entries to the 2010 world championship."
This series will have transparent governance, one set of regulations, encourage more entrants and listen to the wishes of the fans, including offering lower prices for spectators worldwide, partners and other important stakeholders," added the statement.
"The major drivers, stars, brands, sponsors, promoters and companies historically associated with the highest level of motorsport will all feature in this new series."
Photo Credit: Paul Gilham / Getty Images Sport