Formula One's governing body has proposed radical cost-cutting measures, including the possible use of standard engines from 2010, to help teams survive the global financial storm.
In a letter to the 10 teams ahead of a meeting with International Automobile Federation (FIA) president Max Mosley in Geneva next week, and seen by Reuters on Wednesday, the governing body put forward a five-year plan of action.
"The FIA believes that Formula One costs are unsustainable," it said.
"Even before current global financial problems, teams were spending far more than their incomes.
"As a result, the independent teams are now dependent on the goodwill of rich individuals, while the manufacturers' teams depend on massive hand-outs from their parent companies.
"There is now a real danger that in some cases these subsidies will cease," added the FIA.
"This could result in a reduction in the number of competitors, adding to the two team vacancies we already have and reducing the grid to an unacceptable level."
The Paris-based body said the sport could only be healthy if a team could race competitively with a budget close to the revenues received from the commercial rights holder.
Honda-backed Super Aguri folded after the Spanish Grand Prix in April while a planned Prodrive team has been shelved.
Former champions Williams, who made a 21.4 million pound loss last year and are sponsored by both bailed-out bank RBS and companies owned by troubled Icelandic retailer Baugur, are now the only team not funded by a manufacturer or a billionaire.
UNCERTAIN FUTURE
However, the future of even some of the manufacturer teams has begun to look uncertain against a backdrop of factory layoffs, steeply falling share prices and dwindling sales.
Some teams, such as Toyota, have annual budgets estimated to be in excess of $400 million (229 million pounds).
The FIA, due to meet the Formula One Teams Association (FOTA) after Sunday's Chinese Grand Prix, put forward three proposals for the period 2010 to 2012.
The first is for an homologated engine produced by a single supplier, after a tender, with current engine makers free to build their own to the same design.
Another option would be for a consortium of teams to obtain a low cost engine from a single supplier, while a third alternative, proposed by FOTA, would see independent teams receive a complete powertrain (engine and gearbox) for less than 5 million euros (3.8 million pounds) per team per season.
The latter arrangement would also include 30,000km of testing and on-track assistance.
The FIA said it also envisaged common chassis parts, including standard suspension and wheels and other expensive parts which "add nothing to the spectacle or to the public interest of Formula One."
FOTA are due to hold meetings in Shanghai, with sources suggesting the ideas on the table could include a ban on refuelling, shorter races and testing restrictions.
The FIA said however that it believes priority should be given "to things which the public cannot see" such as telemetry rather than visible elements such as refuelling.
For 2013, it said it wants to see a "modern high-technology" powertrain with a more compact engine using exhaust energy and heat recovery systems.
