The iSport team looks to be dropping out of the 2013 GP2 Series, with team principal Paul Jackson quoted as confirming that the team's financial situation does not allow it to participate in the feeder series this year.

"We will not be able to," Jackson said, explaining that the downturn in the economic climate affecting sponsorship was to blame. "This is a trend that can be seen at the moment in all Formula series."

According to reports that first appeared in specialist German motorsports site late on Friday afternoon, iSport is seeking to sell its GP2 assets to an interested third party in the hope that the core of the team might be able to continue racing under new ownership.

Talks reportedly began on Thursday afternoon. However, with pre-season testing due to start next week at Jerez followed by a second three-day session at Catalunya the following week, time is tight for any rescue operation that will allow a newly constituted team to field any teams and drivers at the first race of the 2013 season calendar in Malaysia on March 24.

What seems certain is that the iSport team in its current incarnation with Jackson at the helm will not be participating. Jackson confirmed that GP2 CEO Bruno Michel was aware of iSport's current financial plight and was supportive of the team's current efforts to sell its assets and transfer its series membership to a new company.

The situation seemingly came to a head when Jackson was unable to land any pay drivers for the forthcoming season with sufficient backing to make a two-car 2013 campaign viable. Industry sources suggest that GP2 teams need drivers with sponsorship in the region of 1.8million euros to cover their full season expenditure.

"We did not find drivers to negotiate contracts with that would have enabled us to ensure participation," Jackson told the website. "My company has no sponsors in the background that can close a shortfall of 500,000 euros," he added.

Jackson explained that iSport is currently solvent and has no outstanding debts, and that he has enough funds to keep going in the short term. However, the balance sheets are not enough to cover a full season's participation in GP2 and therefore Jackson said that it would be irresponsible of him to continue with preparations for racing only to risk going bust mid-season.

"There is no point in committing commercial suicide," he said, adding that he and the team had investigated all possible solutions to try and continue competing.

"I need to be sure before the season starts that there is enough to carry over. This is not currently the case," he said. "This is too uncertain. I'm responsible for my staff."

Jackson later told Autosport that it was important to him to maintain iSport's reputation in the industry, both as as winning race team and a financially viable engineering business. "We're a team with a good reputation," he said. "We wish to maintain that in the future."

iSport was a founding member of the GP2 Series in 2005 and has been involved ever since, winning the driver and team championships in 2007 with Timo Glock. Other drivers that have competed for the team include Scott Speed, EJ Viso, Karun Chandhok, Bruno Senna, Giedo van der Garde, Oliver Turvey, Sam Bird and Davide Valsecchi.

Last season's drivers with the team were Marcus Ericsson and Jolyon Palmer who finished in eighth and 11th place in the drivers championship, between them amassing two wins and two second places along with three further podium finishes. iSport itself finished in sixth place in the team championship.

Jackson added that if the team was able to sell off its GP2 assets then it would look to channel the money toward racing in another, lower-cost championship that would ensure the ongoing survival of the company as a racing operation.

If iSport does exit the series, it will be the third team to withdraw since the end of the 2012 season. Scuderia Coloni exited over unspecified disagreements with the series organisers, while Ocean Racing Technology was forced to quit in January because of financial problems.

Two new teams, MP Motorsport and Hilmer Motrosport, have already taken their places on the starting grid for the 2013 season.

Super Nova Racing was another casualty of the economic downturn earlier in 2012 when it was forced out of the competition and its place taken by new team Venezuela GP Lazarus.

Other GP2 teams have weathered the storm by linking up with other companies, such as Carlin entering into a partnership with Russian car manufacturer Marussia Motors to give the Marussia F1 team a GP2 presence, and Lotus Cars moving to rebrand the team formerly known as ART Grand Prix under the new name Lotus GP.