Formula One is poised to become a 26-car championship next season for which a £40million budget cap has been imposed.

Following yesterday's meeting of the World Motor Sports Council in Paris, it was agreed the maximum number of cars permitted to enter would be increased to 26, two for each team.

After announcing a £30million cap in mid-March, the WMSC has now increased that figure by a further £10million, with the formation of a new costs commission to police the regulation.

The sport has not seen 26 cars on the grid for 15 years, with the budget cap designed to encourage new entrants.
The World Council, spearheaded by FIA president Max Mosley and F1 supremo Bernie Ecclestone, clearly feel, by raising the bar, it will not deter prospective new teams from signing up.
The additional £10million also allows the current teams a further degree of leeway, although they may still feel it does not go far enough.
Teams, though, will still have freedom of choice as to whether to be governed by the cap. However, those that opt out face certain restrictions.
Any team operating within the budget will be allowed to use movable front and rear wings and, most crucially, an engine not subject to a rev limit.

Those teams will also be allowed unlimited out-of-season track testing, with no restrictions on the scale and speed of wind-tunnel testing.

The £40million figure will cover all team expenditure except:

* Marketing and hospitality

* Remuneration for test or race drivers, including any young driver programmes

* Fines or penalties imposed by the FIA

* Engine costs (for 2010 only, and specifically designed to retain the current manufacturers within the sport)

* Any expenditure the team can demonstrate has no influence on its performance in the championship

* Dividends paid from profits relating to participation in the championship

Any team wishing to compete in next year's championship must notify the FIA between May 22 to 29 and state whether they wish to compete under the cost-cap regulations.

A further 'start-up bonus' for the new teams is that, as commercial rights holder, Ecclestone has agreed to offer participation fees and expenses to the new teams.

There will be an annual payment of US dollars 10million (£6.75million) to each team, plus free transportation of two chassis, freight up to 10,000kg in weight, as well as 20 economy-class tickets for each race outside Europe.

As for the new Costs Commission, it will consist of a chairman and two other commissioners appointed by the WMSC for terms of three years, who will be independent of all teams.

One commissioner will be a finance expert and the other will have a high level of experience in motor sport, while the chairman will have appropriate experience and standing in motor sport or sports governance.

The WMSC have also confirmed the ban on refuelling during races, to save on costs of transporting refuelling equipment and increase the incentive for engine builders to improve fuel economy, and on tyre warmers.