Formula One's governing body the FIA is to take legal action against eight teams who plan to break away to form their own championship.
The Turkish Grand Prix
Many of the teams who competed in the Turkish Grand Prix will not be in F1 in 2010
Ferrari, McLaren, Brawn GP, Renault, Toyota, BMW Sauber, Red Bull Racing and Toro Rosso have all declined to enter F1 for 2010.
The FIA has warned of a 'financial arms race' within the sport over the split.
The development comes after the Formula One Teams' Association (FOTA), failed to reach a compromise with FIA president Max Mosley over plans for a £40m budget cap.
The FIA said: "The actions of FOTA as a whole, and Ferrari in particular, amount to serious violations of law including wilful interference with contractual relations, direct breaches of Ferrari's legal obligations and a grave violation of competition law."
Earlier, the governing body said: "We are disappointed but not surprised by FOTA's inability to reach a compromise in the best interests of the sport.
"It is clear that elements within FOTA have sought this outcome throughout the prolonged period of negotiation and have not engaged in the discussions in good faith.
"The FIA cannot permit a financial arms race in the championship nor can the FIA allow FOTA to dictate the rules of Formula One."
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The FIA had issued a deadline of Friday for teams to enter next year's championship unconditionally.
The 2010 competition now consists of Williams and Force India, along with the three new outfits - USF1, Campos and Manor.
The split was announced ahead of the British Grand Prix, which takes place at Silverstone on Sunday.
FOTA said it had tried to work with the FIA and Bernie Ecclestone, who holds the commercial rights to F1, to "develop and improve the sport" since forming last September.
But it added in a statement: "It has become clear, however, the teams cannot continue to compromise on the fundamental values of the sport and have declined to alter their original conditional entries to the 2010 world championship.
"These teams, therefore, have no alternative other than to commence the preparation for a new championship which reflects the values of its participants and partners."
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Many of the team bosses, including Brawn GP's Ross Brawn, were originally in favour of the voluntary budget limit, although Ferrari were not.
FOTA said it had already achieved "substantial measures to reduce costs" and had agreed on further voluntary budget cuts.
Mosley angered the teams when he announced the introduction of a cap at the end of April without consulting them.
They accused him and Ecclestone of being divisive and ignoring their views on the future direction of the sport