Luca di Montezemolo (top, in Bahrain last weekend) has registered his disquiet at the FIA's new cost-cap proposals; Felipe Massa on his way to a no-points score in Bahrain (middle) and during a pit stop for tyres and fuel (bottom); refuelling will be banned next year.

A war of words has broken out between Ferrari and the FIA President Max Mosley over a proposed £40 million cost cap with Luca di Montezemolo saying in a letter that the championship will become "fundamentally unfair and perhaps even biased".

In a letter to FIA President Max Mosley, the Ferrari President said that the budget cap will "inevitably mean that one category will have an advantage over the other and that the championship will be fundamentally unfair and perhaps even biased." Mosley retorted sharply: "I hope Ferrari will take the lead in agreeing the cost cap mechanism, thus freeing its engineers to work and preserving its shareholders' money."

Applications to compete in the 2010 FIA Formula One World Championship are to be submitted to the FIA during the period 22-29 May 2009. Teams must state in their application whether they wish to compete under the cost-cap regulations which mean that from 2010, all teams will have the option to compete with cars built and operated within a stringent cost cap. The cost cap for 2010 will be £40m per annum. This 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); any expenditure which the team can demonstrate has no influence on its performance in the Championship; and dividends (including any tax thereon) paid from profits relating to participation in the Championship.

A new Costs Commission is being set up to monitor and enforce these cost-cap financial regulations. The Costs Commission will consist of a Chairman and two other Commissioners, appointed by the WMSC for terms of three years. One Commissioner should be a finance expert and the other should have high level experience in motor sport. In addition to the payments which it already makes to the top ten teams in the Championship, Formula One Management, the commercial rights holder, has agreed to offer participation fees and expenses to the new teams. This includes an annual payment of US$10 million to each team plus free transportation of two chassis and freight up to 10,000 kg in weight (not including the two chassis) as well as 20 air tickets (economy class) for each round trip for events held outside Europe. To be eligible for this, each new team must qualify as a “Constructor” and demonstrate that it has the necessary facilities, financial resources and technical competence to compete effectively in Formula One. 

To enable these cars to compete with those from teams which are not subject to cost constraints, the cost-capped cars will be allowed greater technical freedom. The principal technical freedoms allowed are: movable wings, front and rear; and an engine which is not subject to a rev limit. The teams will also be allowed unlimited out-of-season track testing with no restrictions on the scale and speed of wind tunnel testing.

It was also confirmed that from 2010, refuelling during a race will be forbidden in order to save the costs of transporting refuelling equipment and increase the incentive for engine builders to improve fuel economy (to save weight). It was also confirmed that tyre blankets will be banned and that the ban on other tyre-heating devices will be maintained.

Meanwhile Ferrari, which has made it clear in the last two days that it is opposed to the new regulations in their present form, issued a statement that read: "On the subject of the future of Formula 1, Ferrari reaffirms its strong commitment and sense of responsibility to maintaining untouched the values of this sport. As the only team to have taken part in every F1 world championship since its inception in 1950 up to the present day, Ferrari strongly believes that this sport should maintain its principles of being at the cutting edge in terms of research, with the teams thus taking part in a sporting and technical contest.

"Ferrari, along with all the other teams in FOTA," the statement issued in Maranello continued, "has, for some time now, felt the urgent need for a significant reduction in costs as from this year, and believes that the future of this sport requires stability of the regulations and the gradual achievement over the next two to three years of a cost-profit balance which would allow current teams to remain in the sport while at the same time encouraging the arrival of new ones. This is the position Ferrari wants to underline today, in the interests of the sport without looking to cause pointless controversy which would be harmful to all those involved in this sport."