Ferrari commits to F1 until 2012

The move comes after Ferrari, F1 supremo Bernie Ecclestone and motor racing's governing body, the FIA, reached a deal to enter into a new version of the Concorde Agreement which will last for another four years.

Ferrari president Luca di Montezemolo said: "It is important and also pleasing that the FIA, which is the governing body and FOM, which represents those who have organised Formula 1 in these past years and Ferrari, which is the only team to have taken part in the World Championship, without a break, since its inception, have put out a strong message of stability for the future of Formula 1. This agreement is in line with what Ferrari had hoped for, for a long time."

FIA president Max Mosley said: "We are very pleased to have reached this agreement with Formula 1's commercial rights holder and the oldest team in the championship. The agreement is significant because it will ensure the future development of the FIA's most important championship."

Ferrari's future plans had been viewed as key to the future success of either Formula 1 or the GPWC, which plans to starts its own series from the beginning of 2008 at the latest.

The Italian team's popularity and heritage, plus its success on the track, put it right at the centre of negotiations with both parties - and a decision to join one series would have served as a body blow to the other category.

That is why di Montezemolo had willingly been so outspoken in his criticisms of the amount of money Ecclestone was taking out of the sport - which was clearly being used as leverage to extract a greater financial package out of the sport.

Although the exact terms of the package on offer to Ferrari is not known, it will likely be in excess of the current 47 percent of television rights money that the teams receive.

Where Ferrari's decision leaves the GPWC is also unclear. It is possible that the company organising the series still believes it can press on and put on a championship to rival F1 - but it will face stiff opposition to convince teams to try and go head-to-head with an F1 series featuring Ferrari.

The one certainty from the events is that Ecclestone has won his fight against the manufacturers and virtually secured the long-term future of F1. Speaking after the announcement, Ecclestone said: "Formula One Management [Ecclestone's company] are delighted that this agreement is in place and that the future of F1 has now been stabilised."