FIA president Max Mosley has vowed to push through vital cost-cutting measures to safeguard the future of Formula One as Honda prepare to leave the sport.
Mosley's move came in the wake of the bombshell confirmation today from Honda that they are to pull out of the sport, with the company up for sale.
The move merely underlines the fears Mosley expressed earlier this year that F1, in light of the current economic crisis, was spending money beyond its means.
A FIA statement read: "The announcement of Honda's intended withdrawal from Formula One has confirmed the FIA's long-standing concern that the cost of competing in the world championship is unsustainable.
"In the FIA's view, the global economic downturn has only exacerbated an already critical situation.
"As the guardians of the sport, the FIA is committed to working with the commercial rights holder (Bernie Ecclestone) and the remaining members of FOTA (the Formula One Teams' Association) to ensure Formula One becomes financially sustainable."
In a statement, Honda president and CEO Takeo Fukui announced that his company's decision to withdraw from F1 was made in light of the global credit crisis to preserve Honda's core business activities.
Fukui said: "We, Honda Motor Co. Ltd, have come to the conclusion that we will withdraw from all Formula One activities, making 2008 the last season of participation.
"This difficult decision has been made in light of the quickly deteriorating operating environment facing the global auto industry, brought on by the sub-prime problem in the United States, the deepening credit crisis and the sudden contraction of the world economies.
"Honda must protect its core business activities and secure the long term as widespread uncertainties in the economies around the globe continue to mount. A recovery is expected to take some time.
"Under these circumstances, Honda has taken swift and flexible measures to counter this sudden and expansive weakening of the marketplace in all business areas.
"However, in recognition of the need to optimise the allocation of management resources, including investment regarding the future, we have decided to withdraw from Formula One participation.
"We will enter into consultation with the associates of Honda Racing F1 Team and its engine supplier Honda Racing Development regarding the future of the two companies. This will include offering the team for sale."
The remaining nine teams, and there are now serious fears at least one more could fall by the wayside before the start of the season in Australia on March 29, have until next Thursday to sign up to the prospect of using a standardised engine.
Mosley has confirmed the FIA are now in exclusive negotiations with engine suppliers Cosworth, along with Xtrac and Ricardo (XR), for the use of transmissions.
In a letter dated today and written to all team principals, Mosley confirms the cost to any team taking up the option will be an up-front payment of £1.68million, then £5.49million per season for each of the three years of the supply contract (2010, 2011, 2012).
The price is based on four teams signing up and includes full technical support at all races and official tests, plus 30,000km of testing.
The annual cost will reduce if more teams take up the option, down to £4.99million (5.84million euros) per team with eight teams, and will further reduce if less than 30,000km of testing is required.
If teams decide not to go with the standardised engine, they have two options open to them:
:: the right to build an engine themselves, but identical to the Cosworth after being supplied with all the necessary technical information.
:: the right to continue to use their existing engine, but with the current ban on development and requirement for engine parity still in place.
In his letter, Mosley expresses his belief that the three choices will stabilise F1, enable independent teams to survive, and facilitate the replacement of a manufacturer team if, as he fears, additional losses are suffered.
If fewer than four teams sign up, Mosley confirms the FIA may still proceed, but the price on offer will vary.
Mosley has also not ruled out the prospect of a breakaway series in the light of his stringent proposals.
A letter to the team principals dated November 18 reads: "We must recognise that in an extreme situation, not all teams may agree with our measures.
"We appreciate that in these circumstances some teams might decide not to enter the world championship and opt instead for some other professional racing series.
"We would, of course, not be concerned with the financial viability of a series which was not part of an FIA championship, nor with the amount of money spent by participants."