Peace broke out in Formula One yesterday when a deal was reached to avert a breakaway series and teams agreed to further cut costs.

Embattled FIA President Max Mosley, who said he would not be seeking re-election, had been at loggerheads with eight teams - Ferrari, McLaren, BMW Sauber, Renault, Toyota, Red Bull, Toro Rosso and Brawn GP - over his plans to introduce a budget cap for 2010.

"The basic news is that there will be no split. There will be one championship in 2010 which is, I think, something we all hoped," Mosley told a news conference in Paris following a meeting of the FIA's World Motor Sport Council.

"We've reached agreement on a number of items. In particular we've reached agreement on reduction of costs. We've had significant help from the teams."

The Formula One Teams' Association, headed by Ferrari President Luca di Montezemolo, had objected to the budget cap which it felt could lead to a two-tier series with the teams agreeing to the cap being allowed greater technical freedom.

The governing FIA further fuelled matters this month by publishing a 2010 entry list, including all the existing 10 teams and three new entrants despite the wrangling.

FOTA responded by announcing plans for a breakaway series next year before last weekend's British Grand Prix but the teams are now committed to F1 until 2012.

"Now the manufacturers, that's to say FOTA, have committed commercially until 2012...as far as the FIA is concerned the commitment is indefinite," the FIA chief added.

Step down

Mosley, who earlier this week hinted he wanted to stay on in his post and would not be forced out, will now step down when his mandate ends in October.

"I will now be able to look at Formula One knowing it's peaceful and stable and be able to stop as was always my intention in October of this year so I won't present myself for re-election now that we've got peace," Mosley said.

The Briton survived repeated calls for his resignation last year after a sadomasochistic sex scandal but won a confidence vote in May 2008.

Formula One commercial supremo Bernie Ecclestone was thrilled with the outcome. "I'm obviously very, very happy that common sense has prevailed," he said.

Montezemolo, who had been due to chair a meeting in Bologna today to discuss plans for a breakaway, was pleased that this year's rules will continue next season.

(Agencies via Shanghai Daily June 25, 2009)