"My letter said that the whole staff were being made redundant," said one employee, who did not want to be identified.

The source did not know how exactly many staff were affected, since a number of them resigned last month, but local BBC radio put the figure at 160 people.

Employees of team principal Tom Walkinshaw's TWR engineering group were not affected.

"I think it's a fairly standard letter," said another employee. "It just says the money hasn't come from the investors so we're making you all redundant. It does go on to say that they are appealing."

Formula One's governing body, the International Automobile Federation (FIA), issued its official entry list for the 2003 season on Monday with just 10 teams.

TURNED DOWN

Arrows were omitted with a footnote explaining that their application had been turned down for "reasons which have been communicated to the Arrows team".

The British-based team, who have been in Formula One for 25 years and hold the record of 382 starts without a win, said in a statement on Tuesday that they would appeal "to the appropriate body" for reinstatement.

Arrows missed the last five races of the season due to financial problems and also deliberately failed to qualify in France.

German driver Heinz-Harald Frentzen left during the season and title sponsor Orange pulled out at the end.

Walkinshaw had argued force majeure, or unavoidable circumstances, for Arrows's repeated absence from races after saying they had received legal advice not to race pending a sale of the team.

A deal with an unnamed American investor never materialised but Arrows said last month they were close to a deal with a Germany-based group of investors.

Team co-founder Jackie Olivier, who sold his share in the team in 1999, told Autosport magazine on Thursday that he was saddened by the situation.

"If the team goes down, it's sad that the Arrows name will disappear," he said. "Arrows survived in F1 for a long time despite not gaining any real success. I ran it with prudence, always thinking of survival.

"Tom tried to make it successful. I kept it going for 22 years, he buried it in three."