Losers to pay ultimate price

The Spanish sunlight gleamed on the silver structure of the team's astonishing new £5million "communications centre", the first ever two-storey edifice in the paddock. But the early-summer warmth could not repel the worrying financial climate which is chilling the world's most lavish sport.

One team owner is said to have spent sleepless nights before a key new sponsor signed on the dotted line this season. As it is, BAR has laid off 52 of its workforce, and last week 40 at Jordan went the same way.

Meantime, F1's majority shareholder Kirch has collapsed. In such circumstances McLaren's extravagant structure looked somewhat vulgar.

The team emphasises its new toy is sponsored wholly by the business television channel Bloomberg, which is just as well since the gadgetry within it knows no bounds. Even an item as trivial as the ashtray has been given a hi-tech spin. Smokers deposit their fag ends in vacuum bowls, which instantly suck away all trace that the cigarette ever existed. Such toys are still considered a worthwhile investment by some.

And this perhaps crystallises the talk of crisis in F1. Once again it is a tale of the haves and the have-nots. Redundancy is an unknown word at Ferrari, Williams or McLaren, although McLaren supremo Ron Dennis owns up to "a difficult commercial period". But in the middle of the grid and below, there are fears that more teams may follow Prost's close-season fate and go out of business with debts of £20m.

"We must try to minimise the costs or F1 as we have known it for 50 years will disappear," said team owner Eddie Jordan. "Very often people try to talk themselves into a recession. But some people can be oblivious to reality as well. There is a downturn. People are spending more than they have got in a bid to remain competitive and that cannot last very long. People say Prost was not typical. But it will happen to someone else and someone else and still people will not take notice. We have to take notice now. It's like pruning a tree. Sometimes to get the best out of it you have to cut it back."

New rules for 2004 were meant to cut costs, permitting the use of only one engine throughout the race weekend in order to level the playing field between the teams. But now the biggest teams plan to deploy whole flying squads of engine experts to each race, in order to keep that one engine in superlative shape while theoretically conforming to the rule. Smaller teams will not be able to follow suit, widening the gulf between the achievers and the also-rans.

"There are areas where we spend too much," said Flavio Briatore, boss of cash-rich Renault. "This is not for the benefit of the event. We need to be more efficient and it's important we help the small teams. F1 needs them.

"At the end of each season big teams have plenty of parts which we could supply to a smaller team. Why can't the top teams sell their technology? It would allow teams like Jordan or Arrows to be more competitive."

Michael Schumacher, who again won comfortably yesterday, does not agree, even though his estimated £41m earnings from 2000 alone would comfortably fund Minardi's entire 2002 season, and Ferrari's current £160m annual budget would keep Minardi going for four years. He believes handouts are "not feasible".

Sir Frank Williams similarly feels the sport should be about the survival of the fittest. Meantime, Briatore and Jordan concur with F1 ringmaster Bernie Ecclestone that the answer is to add another grand prix to the 17-race schedule. That would cut testing, which actually costs more than racing.

"The more money they get, the more they spend," said Ecclestone, president of Formula One Management. "People throw what is available at winning, or on luxuries they have become used to. Teams often run an extra team for testing only and the cost is enormous.

"I don't think the teams are any worse off than previous seasons. I don't know for sure how all the teams are doing, but you don't see well-managed teams like McLaren or Williams having major problems."

Indeed, as long ago as last autumn Dennis not only had all his team's funding in place for this year - in excess of £100m - he also had more than 80 per cent of McLaren's 2003 budget in place, more than 85 per cent of its 2004 budget and more than 80 per cent of its 2005 budget.

But Dennis is not a cast-iron believer in the crisis facing smaller teams.

"Some of their owners still have private planes and yachts," he pointed out. "If my team wasn't competitive I'd be selling that stuff to make sure it was."