The FIA has introduced a £40 million budget cap to go on offer to all teams from next season onwards. Although teams are not obliged to follow the new system, they will be offered great technical freedom such as unlimited testing, moveable wings and no engine rev limits if they do so.

Formula One's governing body introduced the budget cap after Wednesday's meeting in Paris to discuss the scheme. An idea first suggested by FIA president Max Mosley, the originally proposed figure of £30 million has been increased following further analysis.

On entering next year's World Championship, teams must state whether they wish to accept the budget cap, and therefore be granted more technical freedom, or continue with an unlimited budget but follow current technical restrictions. The cap will cover the running of the team minus costs for marketing, hospitality, driver salaries, FIA fines or penalties, engine costs, outside expenditure (with evidence of it no influences on the championship) and taxes.

The principal technical freedoms on offer feature moveable front and rear wings plus the loss of rev limiters for engines. On top of this, teams will be granted unlimited off-season testing plus no restrictions on the scale or speed of wind tunnel development testing.