BMW today announced they will quit Formula One at the end of the season.

The German company said they made their decision - just eight months after Honda withdrew - because of "current developments in motor sport" but it comes after their rapid fall from title contenders to no-hopers.

BMW joined Formula One in 2005 and enjoyed their best campaign last year, with Robert Kubica finishing fourth in the championship and Nick Heidfeld sixth.

However, this year's car, which was redesigned to meet major new technical rules, has struggled badly and the team have picked up just eight points.

Today's announcement could spark a battle for Kubica, with the talented 24-year-old a potential target for Ferrari or possibly Brawn GP if they decide to replace Rubens Barrichello, who turns 38 next year.

The future is less clear for Heidfeld, 32, although with three new teams on the grid next season a drive could open up for him.

BMW's decision was taken at a board meeting yesterday and came just as the teams were on the verge of signing a new commercial agreement that would have committed them to at least the end of 2012.

Dr Norbert Reithofer, chairman of the board of management of BMW, conceded it was "a difficult decision" to withdraw.

He added: "It's a resolute step in view of our company's strategic realignment. Premium will be increasingly defined in terms of sustainability and environmental compatibility.

"This is an area in which we want to remain in the lead. Our Formula One campaign is thus less a key promoter for us."

BMW had hoped to win the championship within three years of coming into the sport but team boss Mario Theissen accepted today's decision.

He said: "Of course, we the employees would all have liked to continue this ambitious campaign and show that this season was a hiccup following three successful years.

"But I can understand why this decision was made from a corporate perspective. We will now focus sharply on the remaining races and show our fighting spirit and put in a good result as we bid farewell to Formula One."

Honda blamed the global credit crunch for pulling out last December and their exit led to the FIA's controversial budget cap, which resulted in a row with teams over funding.

Motorsport's governing body today claimed BMW's withdrawal could have been avoided if initial planned cost cuts had been imposed.

In a statement, the FIA said: "We regret BMW's announcement but are not surprised by it. It has been clear for some time that motor sport cannot ignore the world economic crisis.

"Car manufacturers cannot be expected to continue to pour large sums of money into Formula One when their survival depends on redundancies, plant closures and the support of the taxpayer.

"This is why the FIA prepared regulations to reduce costs drastically. These measures were needed to alleviate the pressure on manufacturers following Honda's withdrawal and make it possible for new teams to enter.

"Had these regulations not been so strongly opposed by a number of team principals, the withdrawal of BMW might have been avoided.

"Nevertheless, new measures are in the process of being agreed which should make it easier for new teams to enter and enable existing ones to be able to participate on much reduced budgets."