PEACE was restored in Formula One yesterday when a deal was reached to avert a breakaway series, and teams agreed to further cut costs.

Embattled International Automobile Federation (FIA) president Max Mosley, who said he would not seek re-election, had been at loggerheads with eight teams over his plans to introduce a budget cap for next season.

"The basic news is that there will be no split. There will be one championship in 2010, which is, I think, something we all hoped (for)," he said at a news conference, after the FIA's World Motor Sport Council meeting.

"We've reached agreement on a number of items. In particular, we've reached agreement on the reduction of costs. We've had significant help from the teams."

The Formula One Teams' Association (Fota), headed by Ferrari president Luca di Montezemolo, had objected to the budget cap, which it felt could lead to a two-tier series, with teams that agreed to the cap being allowed greater technical freedom.

It had said that the teams were already cutting costs individually to cope with the global economic crisis and that no overall regulation was needed.

Last week, it announced plans for a breakaway series next year, but the teams have now committed themselves to F1 until 2012.

Mosley, who earlier this week hinted that he wanted to stay on in his post and would not be forced out, will step down when his mandate ends in October.

He said: "I will now be able to look at Formula One knowing it's peaceful and stable, and be able to stop, as was always my intention, in October this year.

"So, I won't present myself for re-election now that we've got peace."

Formula One commercial supremo Bernie Ecclestone was thrilled with the outcome.

He said: "I'm obviously very, very happy that common sense has prevailed, which I've always believed it would, because the alternative was not good at all.

"I'm very happy that the teams have come to their senses to stop spending large amounts of money."

Fota head Montezemolo, who had been due to chair a meeting in Bologna today to discuss plans for a breakaway, was pleased that this year's rules will continue next season.

"I think the decisions we have shared this morning are important. We will have the rules of 2009, same rules for everybody. It means that we have stability," he said. - Reuters