Formula One and its millions of followers around the world were able to breathe a huge sigh of relief yesterday after Max Mosley was stripped of his power as FIA president in a deal that ends the prospect of a breakaway series.

On a day of intense drama at the headquarters of the FIA, the governing body of world motorsport, in Paris, Mosley agreed effectively to step down as president after a 16-year rule, in return for which the Formula One Teams Association (Fota) said that it will give up its plans to launch a parallel championship.

The breakthrough, which came unexpectedly and after weeks of uncertainty and mudslinging, means that the sport next year will look very like this year after all, with all the present teams on the grid plus three newcomers in Campos Meta, US F1 and Manor Grand Prix. And while measures will be in place aimed at cutting costs, there will be no budget cap.

It had become increasingly clear that Mosley had miscalculated in his attempt to impose a budget cap on the teams — not because they did not want to save money, but because they did not want him interfering in their businesses. Thus what had started as a row over cost-cutting became a revolution against what they see as his autocratic rule.

The lever that got Mosley out was the pressure from the main owners of Formula One, CVC Capital Partners as represented by Bernie Ecclestone, the commercial rights-holder, who feared that their investment was in danger of being severely damaged by the breakaway. Ecclestone, together with Luca Di Montezemolo, the Ferrari president who led the revolt, met Mosley in Paris before a meeting of the FIA’s World Motor Sport Council and told him that his game was up.

Mosley tried later to put a positive spin on what the teams were viewing as a comprehensive victory over their old foe. “There will be no split . . . we’ve reached agreement on a number of items, in particular we’ve reached agreement on reduction of costs,” he said.

Mosley added: “My departure was planned, agreed, arranged — all the staff have known for months.”

This contradicts a letter that Mosley wrote to FIA member clubs on Tuesday, in which he said he was considering standing for office for a fourth term. The truth is that Mosley was sacrificed to prevent the sport falling apart. Although he did not disclose the conditions himself, The Times understands that not only has he agreed not to stand for re-election, he has also agreed not to assume any other role in the FIA once his tenure as president has finished. The teams have secured guarantees on that, the terms of which have not been disclosed, in a bid to prevent any last-minute change of heart by Mosley, who is famous for his U-turns on his own future.

In addition, Mosley has agreed not to have any role in the governance of Formula One from now. That will be assumed by Michel Boeri, the president of the FIA Senate, pending a presidential election in October.

The focus is already switching to Mosley’s successor, with Mosley himself noting that the teams may not like the next president either.

“Whether the person who succeeds me will be more to their liking remains to be seen,” he said in a remark taken, by some, as a reference to Jean Todt, the early front-runner and widely disliked former team principal of Ferrari.