A resolution has been finally hammered out between Formula 1's governing body and the "Renegade League", the eight teams who threatened to break away from the F1 format, FIA president Max Mosley has announced, as quoted by the BBC on June 24.

The warring factions were entangled in a bitter dispute over the anticipated "voluntary" budgetary cap of 40 million pounds sterling and the proposed technical changes for the new season, which some teams thought to be unfair and unreasonable.

In the light of one of the world's most popular sports, rich in heritage and tradition of being disbanded however, "common sense has prevailed" and workable compromise has been reached. As part of the deal,  Mosley has vowed not to stand for re-election as president after his contract expires.

The Renegade League which consists of Ferrari, McLaren, BMW Sauber, Renault, Toyota, Red Bull, Toro Rosso and Brawn GP – threatened to part ways after the initial negotiations collapsed last week, but following the emergency meeting on June 24, Bernie Ecclestone expressed his delight in the positive outcome of he proceedings.

"There will be no split. We have agreed to a reduction of costs," said Mosley as quoted by the Guardian.

"There will be one F1 championship but the objective is to get back to the spending levels of the early 90s within two years."

Ecclestone told the BBC that he was "very happy common sense has prevailed", following a meeting of 120 members of the FIA in Paris aimed at resolving the crisis.