The FIA are holding firm in their stance on the controversial new rules, despite a breakaway series being confirmed last night by the Formula One Teams Association (Fota).

Formula One is facing the biggest crisis in its history after the majority of the teams decided to begin preparations for an alternative championship.

On the eve of the British Grand Prix at Silverstone, and in a move that could signal the end of the hegemony over motor sport’s pinnacle category by Bernie Ecclestone, the commercial rights-holder, and Max Mosley, the president of the FIA, the teams decided that they had no alternative but to set up their own series.

After meeting at the headquarters of the Renault team near Oxford, Fota said that it had genuinely sought a compromise solution in the row with the FIA over budget capping for next season, but made no progress.

“The teams therefore have no alternative other than to commence the preparation for a new championship which reflects the values of its participants and partners,” Fota said in a statement.

The FIA responded this morning by insisting that they would not back down, leaving the argument in stalemate.

"We are disappointed but not surprised by Fota's inability to reach a compromise in the best interests of the sport," the FIA's statement said.

"It is clear that elements within Fota have sought this outcome throughout the prolonged period of negotiation and have not engaged in the discussions in good faith.

"The FIA cannot permit a financial arms race in the championship nor can the FIA allow Fota to dictate the rules of Formula One.

"The deadline for unconditional entries to the 2010 FIA Formula World Championship will expire this evening.

"The 2010 FIA Formula One World Championship entry list will be announced tomorrow."

In an ambitious vision for the future of its alternative championship, Fota appeared to predict that most of the top drivers and stakeholders would take part. “The major drivers, stars, brands, sponsors, promoters and companies historically associated with the highest level of motor sport will all feature in this new series,” Fota insisted.

The teams involved in the breakaway are Ferrari, McLaren-Mercedes, BMW Sauber, Renault, Toyota, Brawn GP, Red Bull and Toro Rosso. Between them they employ almost all the top drivers in the sport, among them Britain’s world champion, Lewis Hamilton, and this season’s championship leader, Jenson Button.

The row over budget capping may be the immediate cause of the split, but there is no doubt that the rebellion by the teams also reflects their collective loss of patience with Mosley.

Privately, team principals have spoken of how they do not want their companies to be in any way beholden to an individual whom they do not trust. Mosley is regarded as dictatorial in style, wilful and meddling, and the breakaway is one way for the teams to escape his influence.

In Formula One politics, grand gestures often lead to little ultimate change. This time the teams have gone out on a limb and they are likely to face enormous obstacles in trying to set up a series in the teeth of Ecclestone and Mosley’s opposition.