FIA president Max Mosley has warned that Formula One will be "in serious difficulty" if it does not take drastic cost-cutting measures by 2010.
Yesterday the FIA reiterated that if the newly-formed Formula One Teams' Association did not come up with proposals to significantly reduce the sport's costs, the governing body would enforce its own measures, and Mosley believes as many as three present teams could be in jeopardy unless steps are rapidly taken.
"It has become apparent, long before the present economic difficulties, that Formula One was unsustainable," Mosley told the BBC.
"Very crudely expressed, one of the teams at the back of the grid cannot possibly hope to raise more than - including the money they get from Bernie (Ecclestone) - say 40 million Euro, let's say £30-35 million, which in the real world is a huge sum of money, but that's the most they can raise. To compete today, they need two or three times that and even then they're at the back of the grid.
"You can't run a business where the outgoings are two to three times the income. Not for very long. It depends at the moment on millionaires - or billionaires, we don't have millionaires any more - millionaires subsidising them, people like Vijay Mallya of Kingfisher or Dietrich Mateschitz of Red Bull. Without them, those teams wouldn't be there.
"We've already got two gaps, we're likely to lose two or three more of the independent teams. Formula One cannot continue like that, that's been obvious for some time.
"At the moment we've got 20 cars. If we lost two teams we'd have 16, three teams 14. It then would cease to be a credible grid.
"Some of the manufacturers may be in difficulty now as well, because if you look at their share prices, their profitability, their sales, the days when they could just toss out 100, 200, 300 million Euro a year, which is what Formula One costs those big companies, I think they're finished. I really think it's a serious situation.
"If we can't get this done for 2010, we would be in serious difficulty. I think we can survive through 2009, but if we don't get it done in 2010, we may be in serious problems."
Mosley believes the key is reduce expenditure on engines and gearboxes at the earliest opportunity.
"There are various things we can do, but the most obvious would be to reduce the cost of the drivetrain," he said.
"At present, if you can believe this, the engine and gearbox together, for an independent team, is upwards of 30 million Euro a year. That could be done for probably five per cent of that cost without the person in the grandstand noticing any difference at all.
"Even those big spenders, if they're given the opportunity to save 100 or 200 million Euro a year, they'll do so. And we've got various means of making sure they don't spend the money, but it does need some draconian changes."