Formula One in crisis as split looms

By Alan Baldwin

SILVERSTONE, England (Reuters) - Formula One plunged into its biggest crisis in 60 years on Friday with eight teams announcing plans to set up their own championship and the governing body taking legal action against them.

The teams' association FOTA said BMW-Sauber, Brawn, Ferrari, McLaren, Red Bull, Renault, Toro Rosso and Toyota were united in a decision that would split the sport in two if carried through.

"These teams...have no alternative other than to commence the preparation for a new championship which reflects the values of its participants and partners," FOTA said in a statement at the British Grand Prix.

The governing International Automobile Federation (FIA) had set a Friday deadline for teams to make their 2010 entries unconditional or risk exclusion in favour of would-be new competitors.

The body said it could not allow teams to dictate the rules and accused FOTA and Ferrari of breach of contract. "The FIA will be issuing legal proceedings without delay," it added.

The eight had submitted entries conditional on the 2010 rules, which include a controversial budget cap, being rewritten and the signing of a new commercial agreement.

Attempts by both sides to reach a compromise failed, with the FIA accusing teams earlier in the week of wanting to take over the sport.