KTM has announced that it will withdraw from the 250cc World Championship at the end of the 2008 season and switch its factory efforts back to the 125cc class.
The Austrian manufacturer joined the 125cc World Championship in 2003 and expanded into the 250cc World Championship midway through the 2005 season - when Anthony West finished second on the team's race debut at a wet British Grand Prix.
Three victories from the first eight rounds of the 2008 250cc season saw Mika Kallio and KTM at the head of the world championship standings until round ten in Germany. The Finn has now slipped to third in the points with two rounds remaining.
However, with 250cc two-strokes due to be replaced by 600cc four-strokes from 2011, KTM has decided to withdraw from the class and focus all its efforts on the 125cc world crown - having finished title runner-up with Kallio in both 2005 and 2006.
"We have decided for the GP 125cc class because contrary to the 250cc class, its existence is secured in the medium to long term," said Winfried Kerschhaggl, head of KTM Racing.
Next year's factory 125cc Red Bull KTM Team, under the technical leadership of Harald Bartol, will field Spanish youngster Marc Marquez and American Cameron Beaubier, a protégé of the KTM MotoGP Academy. A further developed version of the 125 FRR will be deployed as a replacement motorcycle.
Kallio is set to graduate to MotoGP next season, with Alice Ducati, although the future intentions of team-mate Hiroshi Aoyama - KTM's first 250cc grand prix winner - remain unknown.
The highest ranked KTM rider in the current 125cc championship standings is Repsol-backed Marquez, in 13th.
KTM and the other full-time manufacturers currently present in the 125cc class - Aprilia/Derbi, Honda (one rider) and Loncin - will be joined by the Chinese-backed Maxtra project in 2009, while the 250cc class could be left with only the Piaggio-owned Aprilia and Gilera brands.
Outside of Aprilia/Gilera, there are just two Hondas on the full time 250cc grid; one run by JiR Team Scot for Yuki Takahashi - who will graduate to MotoGP next year - and the other a Thai Honda entry for Ratthapark Wilairot.