Dennis gives Prodrive a July deadline

Prodrive will enter Formula One next season and they are planning to use customer cars and engines, with McLaren believed to be the main candidates for the deal.

Dennis, however, has warned that the agreement must be concluded by July.

"Prodrive are ambitious and have a solid historical base," Dennis was quoted as saying by Autosprint magazine. "But to take this project forward, we need the documentation to be perfect.

"That means that it must not expose us to the risk of dispersing our resources, nor expose us to other financial risks.

"Now time is really getting short. If by, let's say, mid-July, we don't have binding documentation, then it's highly unlikely we will commit to a programme for 2008. We don't want to do anything if there isn't an official announcement by July."

Prodrive boss David Richards said earlier this year that he is planning to announce their team and sponsorship plans at the British Grand Prix in July.

Dennis said using customer cars, Prodrive will need a third of the budget of McLaren.

"I'd say the management costs of a second team, from our point of view, are less than a third of the current budget," Dennis added.

"While for a team who buy everything to create their own structure, it's about half of our budget. Eliminating the cost of building your own car greatly lowers expenses."