After months of speculation, Jorge Lorenzo has signed a new MotoGP contract with Yamaha.

Graduating to MotoGP as a double 250cc world champion in 2008, Lorenzo took his first victory at round three before accidents and injuries blunted his challenge. A late-season resurgence confirmed Lorenzo as the rookie of the year and he began 2009 with a bang by winning two of the first four races.

A run of six consecutive podiums was broken when he fell from the lead at the British Grand Prix, and another fall while at the front in Brno has left Lorenzo 50 points behind team-mate and reigning six time champion Valentino Rossi heading into this weekend's twelfth round at Indianapolis.

With Lorenzo's two-year contract expiring at the end of this season, the 22-year-old's future has been the subject of intense speculation since rumours of a shock Honda switch first emerged at round two in Japan.

Honda announced at Brno that it would stick with Dani Pedrosa and Andrea Dovizioso, but Yamaha's hopes of quickly concluding negotiations were dashed by Ducati which - against the backdrop of uncertainty over Casey Stoner's future - made a big money offer to Lorenzo.

Some reports even suggested that a Lorenzo-Ducati deal was as good as done, but a source close to Lorenzo told that the rumours were untrue and a new one year deal with Yamaha has now been officially announced.

"I am very happy!" said Lorenzo. "Today is a good day because I have decided to remain with the Yamaha Factory Team in 2010. It was a very important decision and that's why I have had to take the last few weeks to make it, but I think that this is the best decision for me in this moment. I want to thank Yamaha because they have always done everything that they have promised, and I especially would like to say thank you to Lin Jarvis and Masao Furusawa."

"We are obviously delighted that Jorge has decided to stay at Yamaha for the next season and we hope that he will remain at Yamaha for many years to come," stated Lin Jarvis, Managing Director of Yamaha Motor Racing. "Jorge has shown his talent, his ability to learn and to compete at the highest level with many excellent performances in 2008 and 2009.

"We have no doubt that he has the ability and drive to become MotoGP world champion and we are proud that he has decided to remain with Yamaha, despite having received some very serious approaches from some of our competitors. This timely decision now allows us to focus on the present championship, where our riders are currently first and second, and to make definitive plans for our 2010 MotoGP program."

What hasn't been mentioned is any kind of new concessions Lorenzo may have got out of Yamaha in his new contract.

Despite speculation about his likely pay increase - Yamaha was rumoured to be willing to double Lorenzo's wages from 2 to 4 million euros (compared with 6-8 million that Ducati is said to offered and the 14 million that Rossi earns) - Lorenzo had insisted that his main focus in terms of 2010 was on-track performance.

The YZR-M1 is the class of the field, but Lorenzo had wanted assurances that his world championship aspirations are best served by continuing as team-mate to Rossi, rather than becoming a number one rider for another factory.

Lorenzo's decision means that other seats, such as those at Ducati and Tech 3 Yamaha, are likely to fall into place, while Honda will be even more confident of converting its 'basic agreement' with Pedrosa and Dovizioso into new contracts.

Rossi's Yamaha contract expires at the end of next season.