Mosley stands down after reaching end of the road

The FIA president, Max Mosley, suffered the most humiliating defeat of his colourful career at the World Motor Sport Council meeting in Paris yesterday and, as the price of peace in Formula One, has been obliged to back down and announce his intention not to stand for re-election when his current term of office ends in October.

Only the previous day he had written to the FIA's member clubs – the national authorities that run motorsport in each country – to confirm that the breakaway teams' plans to stage their own championship for 2010 had prompted him to consider running again and the tone of his communication, and his clear refusal to back down, only made yesterday's outcome all more embarrassing.

Though the leading teams, who together form Fota (Formula One teams Association), were loath to put it into words after declaring at Silverstone last weekend their intention to start a breakaway series, it was clear that any peace deal with the governing body was predicated on Mosley standing down.

Having called the team principals "loonies" in the immediate aftermath of their declaration last Friday, Mosley appeared to be in a more conciliatory frame of mind when he returned unexpectedly to Silverstone on Sunday. His defiance seemed to be undiminished, however, in the letter he circulated to the clubs in support of his intention to continue the fight. In it, he expressed his intention to resist what he saw as an attack by the teams on the "purpose and structure" of the FIA.

"Over recent weeks it has become increasingly clear that one of the objectives of the dissident teams is that I should resign as president of the FIA," he said. "Last year you offered me your confidence and, as I wrote to you on May 16, 2008, it was my intention not to seek re-election in October this year.

"However, in light of the attack on the mandate you have entrusted to me, I must now reflect on whether my original decision not to stand for re-election was indeed the right one. No president of the FIA could allow this to go unanswered..."

It was a sign of his weakening position that he then felt it necessary to try to link the renegade teams' plans with profligacy at the expense of the taxpayer, when it was clear all along that there were no further disagreements over budget caps – everyone had settled on $100m (£61m) for 2010 and $45m thereafter – and that the arguments revolved around his dictatorial governance of the sport.

"It is extraordinary that, at a time when all five manufacturers involved are in great financial difficulty and relying on taxpayers' money, their Formula One teams should threaten a breakaway in order to avoid reducing their Formula One costs," he continued. "It remains to be seen whether the boards of the parent companies will allow precious resources to be wasted in this way."

Yesterday it was the WMSC which made its feelings known. In a manner that suggested support for him was weak, he, the commercial rights holder Bernie Ecclestone and the FOTA president Luca Di Montezemolo were instructed to leave the meeting and go into another room to thrash out a peace proposal.

It is not known what arguments either Ecclestone or Di Montezemolo put forward, though it is feasible to speculate that the former may have threatened to throw in his lot with the FOTA teams and that the latter confirmed the teams' intention to go their own way, thus significantly weakening the FIA's relevance.

The upshot was that Mosley capitulated on all of the things he had stood out against previously, most notably his re-election and the signing of a new Concorde Agreement which will run until 2012. The teams have now all agreed to this.

"There will be no split," Mosley announced yesterday. "We have agreed to a reduction of costs. There will be one F1 championship but the objective is to get back to the spending levels of the early Nineties within two years." In other words, to the figures already agreed.

An FIA statement yesterday said: "In view of this new agreement and with the prospect of a stable future for Formula One, FIA president Max Mosley has confirmed his decision not to stand for re-election in October."

The FIA further confirmed that the 2009 rules will continue into 2010, when the renegade teams McLaren-Mercedes, Ferrari, Brawn, Renault, BMW Sauber, Toyota, Red Bull and Toro Rosso will have entries alongside Williams and Force India, who had already signed up with the FIA, and newcomers US F1, Campos Meta and Manor. The news means the end of the hopes of other newcomers, Prodrive, Lola and Epsilon Euskadi, who had hoped to enter the FOTA series after failing to secure FIA entries.

Where the power lies now: Winners and losers in the F1 row

Winners

Bernie Ecclestone Thrashed out the peace deal, thus safeguarding the value of his commercial rights to market Formula One. He carries on as he was, with his reputation more formidable than ever.

Luca di Montezemolo President of the teams association Fota, and head of Ferrari, the prime mover in the breakaway, Di Montezemolo emerges much stronger. He becomes a key player in the democratic process of running the sport from now on.

Losers

Max Mosley Seriously weakened, despite insisting: "As far as I'm concerned the teams were always going to get rid of me in October." No clear indications as to his future.

Jean Todt Former Ferrari principal was Mosley's choice as successor, but acrimonious history with Ferrari and other teams makes this highly unlikely.

Nick Craw Current deputy to Mosley, but the American, who is coy about his age but thought to be in his seventies, is considered too old to take over.