Tom Walkinshaw, Hill's team chief, had been hoping to change his Yamaha engines, which have been criticised for their lack of reliability and horsepower, for their Japanese rivals from next year. He will now have to decide whether to stay with Yamaha, buy in Ford engines or perhaps build his own.
The development could have a major bearing on Hill's career. The 37-year- old world champion knows he needs a more powerful engine if he is to challenge again for the championship. He may not now take up the option of an extra season with the Oxfordshire-based team, knowing their chances of being competitive next year have been dealt a serious blow.
He was tipped to join Jordan this season before opting for a pounds 4.5m deal with TWR, but could yet link up with the Silverstone team. Jordan's drivers, Giancarlo Fisichella and Ralf Schumacher, have been linked with moves to Benetton and McLaren respectively for next season.
Hill's acknowledged technical know-how and feedback could be vital as Jordan begin the learning process with Mugen-Honda after three years with Peugeot.
Peugeot are now expected to form an all-French alliance with the team headed by the four-times world champion, Alain Prost, who are at present using the Mugen-Honda engine. Hill could also find a home there.
Eddie Jordan, founder and managing director, believes the deal will help his team make that next step up to become world title challengers. "This is another significant milestone for Jordan," he said. "We have worked hard for a long time to earn this opportunity. Mugen-Honda will provide additional strength and depth to our package."Reuse content