Formula One will continue with 11 teams next season after Prodrive ruled out their scheduled participation due to a legal challenge and commercial uncertainty.The British-based team, who had hoped to use cars and engines provided by frontrunners McLaren and Mercedes, said in a statement on Friday that they still wanted to enter the sport one day however.

"Over the past 18 months we have put considerable effort into securing an agreement for the supply of cars and engines from McLaren and Mercedes, as well as financial backing from a partner new to the sport," Prodrive said.

"It was therefore particularly disappointing to face a last minute legal challenge to our entry, when our plans have been public knowledge for over a year.

"This legal challenge and continuing delays to the new 'Concorde Agreement' represent a fundamental change in circumstances," it added.

"Therefore we must now realistically rule out the possibility of Prodrive being on the grid in 2008."

Prodrive, run by former BAR and Benetton team boss David Richards (pictured), had secured the 12th and final team slot in Formula One after being chosen by the governing FIA from 22 applicants in April last year.

However their plans to become effectively a McLaren 'B' team were stymied by a legal challenge from former champions Williams, who see the arrival of so-called 'customer cars' as a threat to their existence.

Prodrive's budget was estimated at around $75 million a year, compared to hundreds of millions for the bigger established teams.

The Formula One rules were due to be changed next year to reduce costs and allow teams to use cars built and designed by others. However, the existing teams have yet to sign a new commercial 'Concorde' agreement.

Prodrive warned in October that a new team could not be viable financially until such an agreement was reached determining the eligibility for revenues for those teams who did not design and build their own cars.

Friday's statement said the team's entire business model was built on the premise that customer cars would be allowed next season.

"It is...still our ambition to compete in Formula One and we are hopeful that a new Concorde Agreement between the FIA, FOA (Formula One Administration) and teams will provide clarity as to the terms on which this might be possible," Prodrive added.

"When this new agreement is reached, we will be in a position to consider the extent to which we can adapt our plans for participation in the future."
Reuters