Cosworth has announced it has reached an agreement with Lotus Racing, which will see the two parties go their separate ways in 2011, paving the way for the Norfolk-based squad to switch to Renault powerplants as has been rumoured for some time.

"Cosworth has reached an agreement in principle with Lotus Racing whereby the team's Cosworth engine supply agreement will come to a conclusion at the end of the current Formula One season," confirmed a brief statement from Cosworth.

"This agreement is subject to contract and until the agreement is signed, neither party will be making any further comment."

The news follows comments made by Lotus team boss, Tony Fernandes yesterday live on the BBC Sport F1 forum, following the Italian Grand Prix at Monza, when he all but confirmed gossip the squad will switch to using Renault engines from next year.

"We have to do something different and it will be done soon," he replied when asked about the Renault rumours. "Lots of negotiations have gone on over the last couple of weeks and we're very happy with the outcome.

"We want to move up the grid and we want to be up there with the Red Bulls and Ferraris in years to come - we're not going to do that overnight but we've got to make those constant steps forwards.

"There's nothing wrong with the [Cosworth] engine but we've had some issues. Watch this space. There will be an announcement soon."

Meanwhile, the Italian Grand Prix itself was a frustrating one for Lotus - as Jarno Trulli retired late on with a gearbox failure, while Heikki Kovalainen had a poor start and was then unable to pass Virgin's Timo Glock, eventually come home 18th.

"One has to be philosophical after today's race, and focus on the fact we had a very good weekend," Fernandes added. "It's obviously disappointing that we had yet another gearbox failure on Jarno's car as he was comfortably pulling away from his nearest rivals until he had to pull over.

"Heikki had an unfortunate start, and that meant his whole race was compromised as he was stuck behind Timo [Glock] and couldn't pass.

"Despite that, it's been a good weekend for the team. We've made some important decisions about next year, and we'll build on what we've learnt here and come back fighting," he summed-up.