Contrary to recent speculation that it would take greater control of Jaguar Racing and rebrand it with the famous Blue Oval badge, Ford now appears to have had a change of heart over its Formula One involvement and put the team up for sale.

The company had been tipped to cut back on its world rallying involvement to throw more money at the F1 programme, but employees at the Jaguar team's Milton Keynes headquarters were apparently summoned to an emergency announcement this morning, only to be told that the operation would be offered for sale with immediate effect.

Ford entered F1 as a 'works' entity following the purchase of Jackie Stewart's eponymous team in 2000, branding its cars with the famous Jaguar 'leaping cat' logo and running in British Racing Green to emphasise the marque's sporting heritage. However, under a series of team principals, the outfit has failed to live up to its potential, scoring precious few podium results and never finishing higher than seventh in the constructors' championship. Drivers of such note as Eddie Irvine, Johnny Herbert and, latterly, Mark Webber, have been unable to turn the team's fortunes around, leading to the conclusion that Ford's investment would be better spent elsewhere.

"After a thorough review over many months, Ford Motor Company has decided it can no longer make a compelling business case for any of its brands to compete in Formula One," Jaguar chairman Joe Greenwell said in a statement, " As a result, we are putting our Formula One businesses up for sale."

"Jaguar's presence in Formula One has been a valuable marketing and brand awareness platform particularly outside our main markets of the US and the UK. However, it was our collective view that it is time for Jaguar Cars to focus 100 per cent on our core business. Having reached this decision, our focus has turned to securing the best future for our Formula One businesses and our employees in these businesses going forward."

Ford Motor Company is still recovering from losses incurred in its road car sales - most recently among its Jaguar brand - and its motorsport programmes are feeling the pinch as a result. Although its NASCAR involvement is unlikely to be affected, the WRC project fronted by Malcolm Wilson's M-Sport concern is also waiting to hear whether there will be funding for 2005 and beyond.

Although current F1 team principal Tony Purnell insisted recently that he had been assured of a budget for next season, his optimism appears to have been misplaced. Potential entrants will now be keeping a watchful eye on the situation, with both drinks brand Red Bull and F3000 champions Arden International having been linked to a possible buy-in or buy-out of the Jaguar team in recent weeks.

Richard Parry-Jones, who oversees the Ford Premier Performance Division, also announced that Cosworth Racing, the company's competition engine subsidiary, would also be put up for sale, potentially ending any Ford involvement in the top flight. Cosworth currently supplies both Jaguar and Minardi with powerplants - and only last week confirmed that it would supply the Italian minnow in 2005. Ford has provided Jordan with engines this season, but the Silverstone team - itself seeking a buyer - is thought to be talking to Toyota for next year.