Amidst earnest calls from Max Mosley for Formula 1 to reduce its costs - and fast - in an age of increasing financial uncertainty, the sport's teams have urged that any 'knee-jerk reaction' to the current credit crunch sweeping the globe would likely be 'catastrophic'.

Earlier this year - before the international economic crisis was even the stark reality it is now - FIA President Mosley announced that at its current rate of expenditure F1 was 'unsustainable' in the future. In May, Super Aguri became the tenth team in the top flight to collapse in the space of the last 15 years.

So far this season teams have spent a combined total of $1.6 billion according to a report from industry monitor Formula Money, and Mosley demanded they get together to come up with means by which to radically cut costs and improve efficiency by 2010 at the latest...or else risk seeing the $4.7 billion sport become no longer 'credible' and disintegrate.

"Very crudely expressed, one of the teams at the back of the grid cannot possibly hope to raise more than - including the money they get from Bernie [Ecclestone] - let's say ?30-35 million," he told BBC Sport. "In the real world [that] is a huge sum of money, but that's the most they can raise.

"To compete today, they need two or three times that and even then they're at the back of the grid. You can't run a business where the outgoings are two to three times the income - not for very long.

"We've already got two gaps, [and] we're likely to lose two or three more of the independent teams. Formula 1 cannot continue like that; that's been obvious for some time.

"Some of the manufacturers may be in difficulty now as well, if you look at their share prices, their profitability, their sales. I think we can survive through 2009, but if we don't get it done in 2010, we may be in serious problems.

"It isn't prompted by the credit crunch. This is something [for which] I've been campaigning for two or three years."

To that end, the Formula One Teams' Association (FOTA) was created, with the remit to bring down spending on engines and gearboxes in particular - or have the sport's governing body impose its own rules and regulations. A meeting has been scheduled between FOTA and the FIA following next weekend's Chinese Grand Prix in Shanghai.

F1's commercial rights-holder Ecclestone, for his part, has been championing the introduction of a standard design engine - the engine being traditionally one of the most costly areas - but with many of the teams backed by major car manufacturers, that idea has been met with distinctly muted enthusiasm to say the least. This year a 'freeze' was implemented on engine development, with all powerplants moreover having to last for two grands prix weekends.

"The thing I am most excited about is pushing and pushing and pushing the homologated engine idea," the 77-year-old told British newspaper The Times. "The new engine will be equalised and there will only be two engine changes a year, so costs are going to dramatically come down - and I mean dramatically."

Australian Grand Prix Corporation chairman Ron Walker, however, has dismissed Mosley's argument that F1 is under very real threat of extinction should drastic action not be taken, arguing that the immediate future of the sport is assured by ongoing long-term sponsorships, circuit deals and broadcasting agreements.

"I believe that what Max is saying is correct, in part," Walker commented. "Costs need to be reduced and there are many people in chorus with him, but as for the survival of Formula 1, I think it's going to go for many decades to come. I don't believe it's in jeopardy of failing next year.

"I was at the Singapore race and I spoke to the majority of the teams about sponsors, and I didn't detect team owners haemorrhaging at the thought of losing sponsors for next year and not being able to compete."

Walker's countryman and former Minardi (now Scuderia Toro Rosso) owner Paul Stoddart equally doubts whether the practice will prove to be quite as straightforward as is Mosley's theory.

"It is very hard to solve this problem," the outspoken Australian told BBC Radio 5 Live, "because Formula 1 has always been about the haves and the have-nots. The biggest disparity I can remember was in 2002, when we at Minardi competed with a budget of $28m against teams with $500 million.

"Max has been trying to get teams to run on a $100m budget, but people will spend what they have to spend. Formula 1 will survive, but I think some kind of budget cap or spending control would be sensible. However, it is much easier said than done. You will always have people who do not agree."

Happily, FOTA does appear to have brought about a good degree of positive dialogue between the teams, all of whom well recognise the necessity of acting now - before it is too late.

Renault managing director Flavio Briatore has insisted that the attitude within the sport of simply throwing more money at situations to cure problems must stop, whilst Williams CEO Adam Parr pointed to the increasing importance of hybrid environmental technology - such as the special 'green' tyres Bridgestone is running in this weekend's Japanese Grand Prix [see separate story - click here] - in attracting new sponsors in an age of economic cut-backs.

"This isn't a business you go into to make money," McLaren team principal Ron Dennis is quoted as having said by the International Herald Tribune. "It's a business about winning, so you're always spending whatever you've got available. That is F1's natural economy."

"The financial crisis is certainly not helping, but motor racing is still highly profitable," Norbert Haug - motorsport vice-president of McLaren's engine supplier Mercedes-Benz - told German magazine Auto Motor und Sport. "In the last ten years we have never exceeded our budget; on the contrary, we have sometimes spent much less."

"If you look at the investment required for a privateer to come into F1 nowadays, the business model just doesn't make sense," countered Red Bull Racing team principal Christian Horner. "Somehow we need to get those costs under control."

Other key areas singled out for re-appraisal - aside from the engine and gearbox - are brakes, brake ducts and cars' centre of gravity.

"I think with all the other teams we do feel there is a need to reduce costs which frankly are wasted expenditure," Honda CEO Nick Fry asserted, speaking to the Daily Telegraph, "and I think there are several of those areas. The V8 19,000rpm engine we have at the moment is hugely expensive, up to about EUR300,000 per unit.

"We need to reduce the cost of competing by 25 per cent to a third in the short-to-medium term, and improve the revenue flow. There is a move to distribute prize money more equitably so that those teams at the bottom get an equal share of the proceeds.

"We do need to work together as ten teams to make sure that the ten teams stick together, work together and survive. We've got a fantastically successful series, we've just come off the back of arguably one of the best weekends (in Singapore) and we need to preserve that.

"There are private teams reliant on sponsorship from companies that are clearly under the most enormous pressure, be it a bank or a commercial sponsor. A grid with ten healthy teams should be preserved. Unless we do something now some teams that are more exposed to commercial issues - the independent teams - are not going to be around."

"Financial crisis, economical crisis worldwide - the answer is simple," added BMW Motorsport Director Dr Mario Theissen. "Formula 1 is of this world and so Formula 1 will be affected as other industries are affected, as all the sponsors are affected. Basically every stakeholder in Formula 1 is affected, and so we have to deal with it like any other operation.

"In my view the ongoing discussions under the umbrella of FOTA are very constructive - the most constructive I have seen in Formula 1 - because it is clear to all of the teams that we have to do something, we have to achieve something and it only works if we come to a joint proposal.

"There are several technical working groups, one for the car and another one on the power train or the engine itself and the commercial and sporting working group - lots of good ideas. I am sure within a few weeks or months we will be able to come up with proposals which will really make a difference to what we see today in terms of costs, in terms of improving the spectacle and the commercial viability of Formula 1.

"We have heard right now that Formula 1 is a very strong operation, it's a big operation and it's very much technology-driven, so that means there is no need to panic - that's message number one. Message number two - you cannot change things of this technical complexity overnight, so we need to take a reasonable approach, an approach which satisfies all the needs including the need for all the teams involved to cut costs.

"It has to be a viable route, which means we cannot come up with a low-cost engine within a few months. This would require huge additional expenses on the manufacturer side, so that means we have to look at a certain period of time and at a combination of measures which can lead us to the final target which is doable in the short-term, and then prepare for the long-term future in a commercially viable way."

One aspect that has been suggested by the BBC, by contrast, is that Ecclestone and Mosley are concerned about the capacity of FOTA to potentially unite F1's teams against them, and so are adopting a 'divide-and-conquer' approach to the situation, putting forward a series of proposals over which they know the teams will disagree, in order to capitalise on the subsequent destabilisation and lack of consensus to drive through their own rules.

Toyota Motorsport President John Howett has even suggested that Mosley's continued presence - in the wake of the widely-publicised sex scandal in which the 68-year-old was caught up earlier this year - is playing a key part in dissuading potential sponsors from investing in the sport, even if he did underline that F1 is unlikely to suffer greatly in the long run.

"I think recent scandals haven't been good for F1," Howett told The Associated Press. "They do make some companies think twice or hesitate to enter F1.

"I think that the teams have a lot of ideas to actually save money, but at the same time not destroy the core DNA or value of Formula 1. I think that given a constructive discussion and shall we say using the current environment of 'financial crisis', hopefully for once we can put politics behind these discussions and really focus on the facts, the real issues and then we will find, I am sure, good solutions.

"I think we need to put things in context really. The first is if you look at some of the figures released for the British Premier League in terms of teams' liquidity, the issues being faced by F1 teams are relatively minor.

"If you look at the advertising budgets of large corporations excluding car manufacturers, they are over $2-3 billion a year. Formula 1 is so powerful and so strong, [and we need to continue] to work with the commercial rights-holder to actually demonstrate the value of utilising Formula 1 as a marketing tool.

"We should also look at the opportunity that this sort of situation presents, not only the pressure; you can paint a very black picture, or you can say there is a lot of upside here for Formula 1 and also for those well-managed Formula 1 teams and well-managed manufacturers.

"Yes, we will go through a hard time, [but] I'm sure we will all survive [and] we will probably come out with a strong sport. The danger is that a knee-jerk reaction could be catastrophic."