Honda are pulling out of Formula One motor racing and will close their team down if no buyer is found by the end of the year, a senior source at a rival team told Reuters.

There was no official confirmation from the British-based team. However, Honda said in a statement in Tokyo that chief executive Takeo Fukui would attend a briefing in on Formula One at 1:30 p.m. (10:00 IST).

"They have a month to find a buyer, otherwise they are closing the team," the source quoted Honda team bosses Ross Brawn and Nick Fry as telling a meeting of the Formula One Teams' Association (FOTA).

"It's very, very sad for Formula One to see a team with the heritage of Honda leaving the sport," the source said, adding that it was no real surprise given that the team "were running up costs to a level that were self-evidently unsustainable."

Another source said the staff were told they would be on three months' notice from January if no buyer was found. The season starts in Australia [Images] on March 29.

The departure of Japan's [Images] number two carmaker, with its sales and profits battered by the global financial crisis, has huge implications for the sport.

TIGHT TIME-FRAME

It would also leave Britain's Jenson Button [Images] without an immediate drive for 2009, although some teams have yet to confirm their lineups.

Brazilian Bruno Senna, the 25-year-old nephew of the late triple world champion Ayrton, had also been tipped to take the place of his veteran compatriot Rubens Barrichello at Honda next season.

Honda's exit will leave the $1 billion (679 million pound) sport, dominated by carmakers, facing a depleted grid of just 18 cars if no buyer with deep pockets can be found in the extremely tight time frame available.

Formula One sources also fear that other major manufacturers, with their factory production suspended and thousands of staff laid off, could follow Honda's example.

Honda and Toyota have been the big spenders in Formula One in recent years.

Brawn, the former Ferrari [Images] technical director who won multiple championships with Michael Schumacher [Images], was hired to run the Honda team after he returned from a one-year break at the end of last year.

Despite its resources, Honda had a dismal 2008 season and was pinning its hopes on next year's new rules levelling the playing field.

Button, a winner for Honda in Hungary in 2006, scored just three points while Barrichello took 11. The team finished ninth overall.

The last team to leave Formula One was Honda-backed Super Aguri, the struggling tail-enders who folded for financial reasons in April and left Britain's Anthony Davidson and Japan's Takuma Sato without a drive.

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