N.Technology has withdrawn its application for a slot on the 2010 F1 World Championship starting grid, blaming the FIA's 'highly questionable process' of selection, 'wrong actions' and 'objectionable management methods' that it contends have 'undermined the sport as a whole' - and along with Prodrive and Lola, the squad is already seemingly being eyed by the Formula One Teams' Association (FOTA) to prospectively join its new breakaway series.

Like Prodrive and Lola, though perhaps less surprisingly, N.Technology was overlooked by the governing body for a place in next year's field, and with the shock announcement earlier today that FOTA intends to pursue its threat to launch its own separate championship away from the jurisdiction of the FIA and its controversial president Max Mosley, the former World Touring Car Championship title-challenging outfit is understood to have lost interest in a category that it believes will surrender much of its allure should its major teams and drivers walk away. And that is not the only one of its concerns...

'With much regret, taking into consideration the highly questionable process conducted by the FIA - which is affected by many irregularities - and the uncertainties regarding the 2010 FIA Formula One World Championship, the MSC board decided last night to withdraw its application as Team N.Technology, under the new regulations allowing entry of 'capped-budget' teams,' read a statement from the Italian operation.

'MSC believes that through its wrong actions and objectionable management methods, the FIA severely hurt MSC's efforts to become a new team and undermined the Formula 1 sport, taken as a whole. MSC shall consider making a new application when the Formula 1 environment is stabilised and the conditions are met for a transparent and loyal contest, ensuring visibility and predictability to the candidate teams. MSC wishes to renew its warm acknowledgements to the sponsors and technical and business partners who support its efforts to become a new independent Formula 1 team.'

In retracting its entry bid, N.Technology becomes the second of the potential newcomers to get cold feet in the light of the enduring, highly destructive FIA/FOTA civil war, after Lola did likewise earlier on in the week. What's more, it is understood that both teams - as well as David Richards' Prodrive/Aston Martin organisation - are now being courted by FOTA to join the new alternative series.

On a dismal day for the FIA, one shining ray of light at least remains in the form of Epsilon Euskadi, spearheaded by respected former Ferrari, McLaren and Benetton engineering guru Joan Villadelprat. The Basque concern was disappointed not to be chosen when the preliminary entry list was revealed at the end of last week, with USF1, Manor and Campos getting the nod over the other hopefuls.

Epsilon Euskadi boasts a state-of-the-art wind tunnel, however, and what is said to be sufficient funding to make for a competitive proposition at the highest level. Whilst Villadelprat has admitted that he would prefer to participate against the major manufacturers, he urged that cost-saving is of the essence in the current economic climate - and called for a swift resolution to the ongoing political dispute to avoid any more damage being done than has already occurred.

"Tomorrow the definitive list is published and we will see what happens," the Spaniard told newspaper 20 Minutos. "We were expecting to be competing with names with a long tradition like Aston Martin and Lola, yet all three have been left out.

"We want to be in F1, but with the big teams at our side...and we can make a good car without spending EUR300 million. For the good of F1, I hope there won't be a parallel championship."