Toto Wolff has stressed that Mercedes’ newly-announced engine deal with McLaren from the 2021 season does not mark the beginning of the end for its factory operation in Formula 1.

Mercedes announced on Saturday morning that it would be linking up with McLaren from 2021 as its power unit supplier, rekindling the famous McLaren-Mercedes partnership that ran from 1995 until 2014.

McLaren used to operate as Mercedes’ de facto works team prior to the German manufacturer establishing its own factory squad in 2010, which has since gone on to win five consecutive drivers' and constructors' championship doubles.

But Mercedes motorsport chief Wolff made clear that the deal was not the first step towards re-establishing McLaren as the works’ outfit when speaking on Saturday following the announcement.

“The relationship is pretty strong because of these days,” Wolff said, referring to Mercedes’ history with McLaren.

“But for us it was important to make clear that there is a works team today, and this is a customer power unit relationship, and not the start of a works deal and us not being there any more.

“As it stands, we are keen on understanding how Formula 1 goes forward, how it develops, and continuing preferably as a works team.”

Mercedes is set to supply three teams with customer engines from 2021 on top of its own factory operation.

Besides the McLaren deal, Mercedes has committed to supplying Williams until 2025, and is also expected to continue its partnership with Racing Point beyond the end of next season.

The prospect of greater competition from a Mercedes-powered McLaren under the revised regulations in 2021 was something Wolff recognised, but he said the benefits outweighed the drawbacks.

“I think that a new era is going to start in 2021 with compressed grids, with more competition,” Wolff said.

“We believe that from a power unit side, there is more learning for us in this exercise with having more competitive customers, adding to the two that we have, and we rate McLaren strongly.

“The steps that Zak [Brown] and Andreas [Seidl] have initiated already look very promising. So the advantages outweigh the potential deficits of fighting a hard competitor like McLaren in the future.”