Banks, Ecclestone Settle F1 Case

Lawyers for both parties appeared in the London High Court to have the settlement confirmed before the case was due to be heard on May 10. It was agreed that details would not be disclosed.

The case would have pitted Formula One Holdings, now controlled by the banks after a first round of legal action last year, against Ecclestone's Formula One Administration (FOA).

The banks, Bayerische Landesbank, JP Morgan and Lehman Brothers, own 75 percent of Formula One holding company SLEC and want their stake translated into influence over Ecclestone's operating companies, like FOA.

FOA has three board members, one of them Ecclestone and another his lawyer Stephen Mullens.

The banks acquired their stake in SLEC after the collapse of Germany's Kirch media group, which had borrowed some $1.6 billion from them.

Wednesday's settlement left open the question of who controls the sport, with some assuming the banks had gained the upper hand even if the 74-year-old Briton is sure to remain as ringmaster for some time yet.

The billionaire dealmaker has decades of experience in running Formula One and is a key player in a sport threatened by a possible split after an existing commercial agreement expires at the end of 2007.

Should that happen, the banks' investment will be worth very little.

The banks' battle against Ecclestone has been followed closely by carmakers who are threatening to launch a rival series from 2008 if they do not get a greater share of Formula One's commercial income.

"We support any initiative that improves the stability and transparency of the sport, but it doesn't change our strategy," said a spokesman for the soon-to-be-renamed Grand Prix World Championship (GPWC) group.

The commercial agreement covering the sport runs out at the end of 2007. World champions Ferrari have already broken ranks with the carmakers to sign a unilateral deal with Ecclestone until 2012.

That deal has led to a new unity among Ferrari's rivals, with Japanese manufacturers Honda and Toyota joining forces with Renault, BMW and Mercedes.