Motorsport's governing body has announced that, in the opinion of its own financial experts, the regulations being proposed by teams' organisation FOTA would not allow the smaller teams to compete on an equal footing with the richest in Formula One.

The claim, which was termed a financial 'arms race' in an FIA statement, came after monetary experts from both sides met, supposedly to discuss the differences in opinion over the way forward for Formula One.

FIA president Max Mosley has long campaigned for a limited budget to be imposed on those competing in the top flight, although his $40m ceiling continues to meet with opposition from eight of the ten competing teams. With Williams and Force India currently suspended from FOTA for agreeing to lodge unconditional entries, the remaining membership is adamant that the sudden imposition of such a limit on spending - albeit with concessions on engine costs and driver salaries, amongst other items - is unworkable.

Although their protest has expanded to encompass other gripes, the financial situation continues to be at the centre of the dispute that could yet see next year's F1 grid featuring more than the three new names that appeared on last Friday's entry list - and potentially competing for column inches with a rival series formed by the dissident teams.

While Renault, Toyota, BMW Sauber, McLaren and Brawn were included as conditional entries on the published list, Ferrari and the two Red Bull teams insist that they share the same views, despite being included as conditional entries by a governing body determined that they fulfil contractual obligations from the past. The 'conditional' teams have been given until the opening day of this weekend's British GP meeting [Friday 19 June] to drop those conditions or be axed from the entry list.

The latest missive from FIA headquarters in Paris claims that the scheduled meeting with FOTA's financial representatives broke up with little in the way of resolution - and with the view that the rules being put forward by the teams' organisation would do little to prevent the sort of spending currently afflicting the sport.

"As agreed at the meeting of 11 June, FIA financial experts met yesterday with financial experts from FOTA," the statement read.

"Unfortunately, the FOTA representatives announced that they had no mandate to discuss the FIA's 2010 financial regulations. Indeed, they were not prepared to discuss regulation at all. As a result, the meeting could not achieve its purpose of comparing the FIA's rules with the FOTA proposals with a view to finding a common position.

"In default of a proper dialogue, the FOTA financial proposals were discussed, but it became clear that these would not be capable of limiting the expenditure of a team which had the resources to outspend its competitors. Another financial arms race would then be inevitable.

"The FIA Financial Regulations therefore remain as published."