The Federation internationale de l'automobile has confirmed the introduction of a budget cap in Formula 1 for 2010, and the amount has been set to £40 million (44m euros).

Durant the last few weeks, FIA president Max Mosley was mentioning a cap set at £30 million, but the figure has been revised upwards following consultation with Formula 1 teams.

The budget cap would run from January 1 to December 31, with the £40 million figure covering all team spending, with certain exceptions, like the costs related to the engines.

Also excluded from the budget cap are marketing and hospitality, driver pay, fines and penalties imposed by the FIA, anything that teams can demonstrate has no influence on its on-track performance and dividends paid from profits relating to participation in the championship.

The FIA will allow those teams that sign up to the budget cap to have increased technical freedom to make it easier to compete with the uncapped teams. This includes adjustable front and rear wings as well as an engine that can run without a rev limit.

Additionally, the budget cap teams will be allowed unlimited testing outside of the racing season, and will not be restricted by the wind tunnel scale and speed conditions.

Finally, the budget cap will be scrutinized by a new Costs Commission that will be set up to ensure that teams are adhering to the regulations. A chairman and two commissioners will be appointed to the body by the WMSC for a period of three years.