Nick Heidfeld and Renault formally part company

The German was dropped by the Enstone-based outfit for last weekend's Belgian Grand Prix, and had been set to take the matter to court later this month to try and prove that his contract was still valid so he could win his seat back.

However, following discussions between Heidfeld and Renault's legal representatives since Spa, a deal has been reached to bring the matter to an end.

Speaking about the situation, Heidfeld said: "Obviously I'm disappointed to be leaving in the middle of the season. I thought I could still make a big contribution to the team, but I have to see things as they are and I want to turn my attention to the future.

"We have taken the right decision by choosing to end our collaboration today. I would like to wish all the friends I made at Enstone a successful end to the season. One thing is for sure - I'll be back racing at the highest level soon."

Renault team principal Eric Boullier added: "Our disagreement with Nick has been the subject of much media coverage lately, and we are pleased to have reached a swift and reasonable solution. Our separation process was already a painful one, and neither of us wanted to go through another legal hearing.

"We're very grateful to Nick for the highly valuable contribution he's made to the team. We certainly had good times together, in particular remembering our podium finish in Malaysia. He is a very strong and determined racer and we wish him every success in the future."

Heidfeld was drafted in to the team as replacement for the injured Robert Kubica. But despite scoring a podium finish in his second race in Malaysia, the German failed to repeat that form over the remainder of the campaign and often struggled to match team-mate Vitaly Petrov in qualifying.

Boullier decided that the team needed a shake-up after the summer break, so drafted in Senna as Petrov's new team-mate for Belgium.

The news of the Heidfeld settlement means that Senna will finish the season. The team had always said that its intention was to keep the Brazilian in the car for the remainder of the campaign, and this has now been officially confirmed.

This week's AUTOSPORT magazine revealed that Heidfeld is in talks to join his former F1 employer BMW for its new DTM programme next year.

Click here to read an exclusive interview with Bruno Senna in AUTOSPORT Plus.