Pedrosa has been a Honda rider for his entire grand prix career, while Valentino Rossi is the only rider in recent history to have walked out of a factory Honda ride by choice, making the Spaniard's contract extension widely expected - particularly when factory seats at rival teams were all taken.

The reason for the delay was rumoured to be Pedrosa's desire to use Bridgestone, rather than Michelin tyres, next season. Repsol Honda's choice of rubber is still to be confirmed for 2008 and Hamane admitted the agreement with Pedrosa followed discussions about what is required to be more successful in the future.

"Maybe you wonder why it took so long for us to reach this agreement," said Hamane. "We had a full conversation about what we should do to win races for the remainder of this year and also to build the structure for the future which will let us win races. We continued our negotiation until today in order for both parties to be in full agreement.

"We are in the era of Japanese manufacturers fighting against an Italian manufacturer, which is a kind of repeat of the racing situation in the sixties," he continued. "Under these circumstances, I became the president of HRC on April 1st and since then I have been thinking what is the most important thing in racing. The conclusion I reached is, the most important thing is human relationships.

"When innovative engineering and the strong fighting spirit of a rider get together, we will be able to achieve victory, I believe. During our conversation with Dani, we put a greater importance on communications and sincere conversation. That resulted in our agreement today and I am really happy about it.

"Dani's talent is beyond question and I believe our responsibility is to prepare a machine capable of winning.

"This is the first year of the 800cc MotoGP era and Honda has been struggling a lot. Of course we have not yet given up the title for this year, but we will prepare a machine which shows the true potential of Honda and also our true fighting spirit from the start of next season.

"With Dani and Nicky Hayden once again riding together we have retained a strong rider line-up for next year," he concluded.

Pedrosa, a former 125 and double 250cc world champion, is the only Honda rider to have won a race this season and currently sits third in the MotoGP World Championship. 2008 will be Pedrosa's third season in the premier class.