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Teams urged to set up 'engine fund'

A plan to set up a 48 million 'Engine Fund' to help Formula One's independent teams is now key to finding a solution to the battle over future engine rules, can reveal.

With the manufacturers getting increasingly pessimistic that they will get the unanimous support they need to push forward the 'Indianapolis Agreement' on part engine homologation from 2007, FIA president Max Mosley has stepped up his involvement in the matter to try and find a solution.

He has told the teams that the only way they are going to get the support of the independent teams now is to set up the 'Engine Fund' immediately.

In a series of letters that have been exchanged between Mosley and Grand Prix Manufacturers' Association chief Burkhard Goeschel and circulated to the teams, plans to create the engine fund to help the sport's smaller teams have been formulated.

With time running out to find a solution to the matter, Mosley's latest letter, a copy of which has been seen by, makes it clear that only the creation of the 'Engine Fund' at this weekend's French Grand Prix will now ensure that the manufacturers get their unanimous support for the 'Indianapolis Agreement.' understands that the 'Engine Fund' deal revolves around the five members of the GPMA - BMW, Honda, Mercedes-Benz, Renault and Toyota paying a total of 70 million Euros (48 million pounds) into a central fund to cover a five-year period of supply.

A tender will then be set up by the FIA for the supply of customer engines in Formula One.

The winning supplier, which could include a company outside the GPMA like Cosworth, would then receive a total of 15 million Euros per year out of the central fund plus an agreed fee from each team that it supplied engines to. understands that the plans for the 'engine fund' do have the approval of the independent teams, and would ensure that they signed up to the terms of the 'Indianapolis Agreement'.

Without the support of the independent teams, the manufacturers are facing the prospect of not only a full engine freeze in Formula One from 2008 but also having to pay out for expensive engine developments during 2007.

It is estimated that this could cost the manufacturers a combined total of 1.2 billion Euros. This is much more than the 70 million Euros it would cost for the 'Engine Fund'.

The idea of an engine fund is not completely new. In 2003, the manufacturers promised the independent teams cheap customer engines in exchange for allowing traction control to remain in Formula One.

The manufacturers never lived up to those promises and failed to deliver engines that cost anywhere near the target figure then of 10 million Euros per year.

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