The mega money days are over for F1 and the arms race has drawn to a close. As the world economy continues to cool and car sales dip faster than anyone ever envisaged, so the sport finds itself having to contract faster than its structure really allows.

The test ban, further engine mileage limits and wind tunnel restrictions should go some way to stabilising things in the short term. The following three years will be all about gradually downsizing and it will have an effect on the structure of teams, structures that grew with boom years money that's been withdrawn savagely suddenly. This is F1's cold turkey phase.

The Honda pull-out has shocked the F1 community, but probably only because most of it was living in a bubble. That bubble has been well and truly pricked now and with dark talk of 'more to follow' in the weeks ahead it's now very clear that the window of opportunity for the teams to band together to form their own series, where all generated revenue was put back into the sport, has firmly closed.

The thought of going to a nervous, jittery board and suggesting they team up with the others to break away from the established championship and set up their own is now very much pie in the sky. It would be risky, costly and could attract all the wrong sorts of headlines in the current climate. That idea, borne of the unity of FOM and it being headed by Ferrari's Luca di Montezemolo, is no longer of the time.

Very much of the time is the revised suggestion of the standard engine. This idea of Max Mosley's in its original guise, whereby it would be compulsory, was a humiliating one for the manufacturers. The idea of badging someone else's design as theirs was hugely emotive and a non-starter from the off.

However, the subtle shift away from that announced by the FIA last week - whereby that low-cost engine is available from 2010 but not compulsory and that current engines can be retained but they will be equalised to the low-cost engine - is a more palatable short term solution appropriate to the prevailing economic climate.

Life after testing

The option of the low-cost Cosworth engine, a compulsory Xtrac/Ricardo transmission and the standardisation of ancillary components - such as wheel hubs, suspension uprights, brake callipers etc - would help reduce a lot of unnecessary spend. In the meantime, the sport has called a halt to the madness of testing. The bigger teams will tell you it's the cheapest way of conducting development, and that if you stopped it they would simply spend the money saved on better simulation tools that the smaller teams couldn't afford.

Well, let's run that risk, let's gamble that the available budgets will simply no longer allow that in future. We're now rid of the 30,000km testing allowance and absolutely there's nothing outside of grand prix weekends once the season has started. No-one should be disadvantaged over anyone else yet the costs are instantly slashed.

Unfortunately, it will probably bring about redundancies as test teams become a thing of the past - but better this be planned now than forced later. This is all about the structure of teams now being inappropriate to the available budgets and there are parallels everywhere in the outside world.

There are plenty of potential positives. Grand prix Friday track time could be extended in part compensation for the testing ban, giving the fans an additional bonus. This could be conducted exclusively by young drivers, extending the idea of Friday testers of a few years ago that brought the talents of Robert Kubica and Sebastian Vettel to the fore.

There are two possible paths facing F1 as it contracts down: either it remains a manufacturer championship but with drastic cost reductions, or it reverts back to how it was before the boom time began in the mid-90s, with a largely independent field.

There's an intriguing middle ground if we lose one more team and a buyer is not found for Honda. That would leave us with a field of 16, which is the trigger whereby the remaining teams can be asked to field third cars. Obviously care would then need to be taken to ensure this didn't trigger yet more pull-outs, and it could be that the smaller teams would not be required to do this.

If, say, the top four teams were asked to field third cars, it opens out quite an intriguing set of possibilities. Ostensibly it means we might see Jenson Button in a Ferrari, Paul di Resta in a McLaren, Rubens Barrichello, Bruno Senna, Giorgio Pantano, Tonio Liuzzi and more slugging it out for chances with BMW and Renault.

On the other hand, there may not be any further pull-outs, a buyer might be found for the Honda team - Team Abu Dhabi with Ferrari engines? - and the confidence crisis could be calmed.

Whichever way it plays out, the complexion of the sport has just shifted. The solutions to the immediate challenges may not be to the taste of F1 purists but they are way better than no F1 at all.