Sebastien Bourdais is to return to full-time US open wheel competition in the IZOD IndyCar Series in 2012, after signing up with Dragon Racing to run alongside British-born driver Katherine Legge.

The news was revealed on Thursday by Group Lotus Director of Motorsport Claudio Berro, who also confirmed that Dragon had sealed a full factory partnership with the engine manufacturer. Bryan Herta Autosport, Dreyer & Reinbold Racing and HVM have also signed engine deals with Lotus.

"We are very pleased to be able to announce this new and exciting partnership with Dragon Racing today, a team which has demonstrated its potential and which we believe will achieve great success thanks to the Lotus IndyCar engine and the security of a major backer," said Berro at the Autosport International Show. "We believe Lotus Dragon Racing and our other partner teams will give us the best opportunity to achieve our ambitious goals."

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The team will be branded Lotus Dragon Racing in 2012 after sealing the new arrangement.

Bourdais caused a stir when he returned to IndyCar with Dale Coyne Racing for a limited season in 2011, more than three years after winning the last of his four Champ Car titles with Newman/Haas in 2007. Since leaving the US, Bourdais had a season and a half in the Toro Rosso F1 team, and then moved to sports cars and the Le Mans Series LMP1 class with Team Peugeot.

Bourdais did not run a full season with Dale Coyne in 2011 after deciding to limit himself to road and street courses only, leaving Alex Lloyd to take the wheel for oval outings such as the Indianapolis 500. After a shaky start back in the cockpit, Bourdais was soon fast improving and he finished four of his last six races of the season in the top six - which seems to have given him the reassurance to return full time.

Bourdais is thought to have split with Dale Coyne Racing after the team apparently decided to opt for Justin Wilson as their driver for 2012. Bourdais' signing is a major coup for Dragon Racing, which was almost shut down for good this time last year after failing to find sponsorship to compete and a deal with Tony Kanaan fell through. Co-owner Gil de Ferran departed the team, leaving Jay Penske struggling to find sufficient funding to revive the operation.

Dragon Racing attempted to enter two cars in the centennial Indianapolis 500, but heavy crashes for Ho-Pin Tung and Patrick Carpentier wrecked both their available cars during practice leaving them unable to make a qualifying attempt for the grid. Instead, Dragon signed a five-race deal with Paul Tracy to drive the #8 car, and Tung also finally made his series d?but with the team at Infineon Raceway.

Like Bourdais, Katherine Legge is another Champ Car driver returning to US open wheel racing after a long absence. She completed two full seasons in the series in 2006 (with PKV Racing) and 2007 (with Dale Coyne Racing) and was the first female driver to leap a lap in Champ Cars and the first to win a major open-wheel race in North America with three victories in the 2005 Atlantic Championship.

Legge moved to DTM racing in Europe when Champ Cars merged with the Indy Racing League to form IndyCar in 2008, but Legge has been seeking a deal to return her to IndyCar racing for the last year.

Lotus Dragon Racing is reported to have secured additional funding for its revived full-season two-car line-up from a number of internet-based businesses, and has been using the time since the end of the 2011 season to relocate its operations to Southern California from Indiana.