Welcome to our new beta design! Click here to go back to the old Newschoolers.
Formula One has been thrown into chaos after the Formula One Teams Association (Fota) carried out its threat to set up a rival championship in 2010.
Eight of F1's major teams have been frustrated by deadlocked talks with world motorsport boss Max Mosley over his controversial budget cap proposals.
"The teams have declined to alter their original conditional entries to the 2010 F1 Championship," said the teams.
"We've no alternative than to commence preparation for a new championship."
Mosley was insistent on introducing a voluntary £40m budget cap for teams to curtail a "financial arms race" in F1.
But Fota refused to agree to his conditions, prompting championship leader Brawn GP, Ferrari, McLaren, Renault, Toyota, BMW Sauber, Red Bull Racing and Toro Rosso to take their drastic action.
They announced their decision following a four-hour meeting on Thursday night ahead of this weekend's British Grand Prix at Silverstone.
"Since the formation of Fota last September the teams have worked together and sought to engage the FIA and commercial rights holder (Bernie Ecclestone), to develop and improve the sport," read a Fota statement.
"Unprecedented worldwide financial turmoil has inevitably placed great challenges before the F1 community.
"Fota is proud that it has achieved the most substantial measures to reduce costs in the history of our sport.
"In particular, the manufacturer teams have provided assistance to the independent teams, a number of which would probably not be in the sport today without the Fota initiatives.
"The Fota teams have further agreed upon a substantial voluntary cost reduction that provides a sustainable model for the future.
"Following these efforts, all the teams have confirmed to the FIA and the commercial rights holder that they are willing to commit until the end of 2012.
"The FIA and the commercial rights holder have campaigned to divide Fota.
"The wishes of the majority of the teams are ignored. Furthermore, tens of millions of dollars have been withheld from many teams by the commercial rights holder, going back as far as 2006.
"Despite this, and the uncompromising environment, Fota has genuinely sought compromise.
"It has become clear, however, the teams cannot continue to compromise on the fundamental values of the sport and have declined to alter their original conditional entries to the 2010 world championship."
Fota added that its championship would put F1 fans first and boast the best drivers and sponsors.
"This series will have transparent governance, one set of regulations, encourage more entrants and listen to the wishes of the fans, including offering lower prices for spectators worldwide, partners and other important stakeholders," added the statement.
"The major drivers, stars, brands, sponsors, promoters and companies historically associated with the highest level of motorsport will all feature in this new series."
Former champions Williams and Force India have already committed unconditionally to the FIA's world championship along with three new entrants - Campos, US F1 and Manor.
The FIA has said there are other would-be newcomers waiting to take the places of those teams that refused to enter unconditionally, although one, Lola, has already withdrawn its application.
The stage is also set for a legal battle, with the FIA saying champions Ferrari and the two Red Bull teams have existing contracts which commit them to the existing championship.
The FIA had set a Friday deadline for five teams - Brawn, BMW-Sauber, McLaren, Renault and Toyota - to convert their provisional entries into unconditional ones or risk being excluded.
There was no immediate comment from the FIA or Ecclestone.