Arrows Reach Out-of-Court Settlement

Arrows have reached an out-of-court settlement with Britain's Inland Revenue to avoid a return to London's High Court, the team have said.

The case, involving the Arrows Autosport company, one of several run by Arrows Formula One team principal Tom Walkinshaw, was due to be heard on Wednesday. But a team spokeswoman confirmed that the matter has now been settled.

The troubled team's future, however, is still under threat three months after financial problems became public knowledge at this year's British Grand Prix at Silverstone in July, when engine suppliers Cosworth demanded payment before the race.

Arrows did not compete in six of the last seven races of the season, which finished with the Japanese Grand Prix on Sunday, citing force majeure as they had been advised to do nothing that could jeopardise a sale of the team.

They were last present at the Belgian Grand Prix in August, when they left the circuit after just one day under instructions from their lawyers. Arrows said in a statement at the time that they were in the process of selling the team to an American investor.

A source close to the team said today there was still hope and added: "The employees are at home waiting for their instructions and there are a large number of people working hard to sort things out."

Arrows appeared in court in Leeds last month to face a winding up order from several of their creditors, including German driver Heinz-Harald Frentzen, who left the team in August.

That case, different to the one which was due to take place on Wednesday, was adjourned and moved to London. The team spokeswoman could not confirm when it will next be heard.