The Silverstone circuit has concluded a five-year deal to continue to host the British Grand Prix until 2024. After almost two years of negotiation with Formula One management, the new contract was announced on Wednesday before this weekend’s race, securing the future of the oldest meeting in the sport.

Silverstone hosted the first F1 race in 1950 and the British Grand Prix has remained on the calendar ever since. However its future had been placed in real doubt when the circuit activated the break clause on their contract in 2017, citing the hosting fees charged by F1 as unsustainable despite it being the most attended meeting in Formula One.

The new contract, which is understood to be sustainable financially with some “slack” now on potentially fluctuating revenues, was welcomed by John Grant, the chairman of the British Racing Drivers’ Club which owns Silverstone, and Chase Carey, the Formula One chief executive.

“We are thrilled to have this in place,” Carey said. “Silverstone is one of the signature races on our calendar and it is truly a special event. Our first race was almost 70 years ago here at Silverstone. The UK has a special place in F1. Having this race in place is one of the core foundations for the future of the sport. Silverstone will be a big part of that future.”

Grant said: “We believe this is great for us and great for F1 as well. The strength of F1 has been built up around the history of the iconic circuits such as Silverstone. F1 is stronger with Silverstone and Silverstone, equally, is stronger with F1. We look forward to a period of stability.”

Last year a record crowd of 140,500 attended on the day of the race but the event only just broke even. It had sustained losses of £2.8m in 2015 and £4.8m in 2016 despite crowds of more than 139,000, largely because of the escalator clause in the contract negotiated by the former F1 chief executive Bernie Ecclestone. This meant the hosting fee rose from £11.5m in 2010 to £16.2m in 2017 and would have been set to reach £25m by 2026.

The Northamptonshire circuit reopened negotiations immediately in 2017 but the owner, Liberty, has been under pressure from many race promoters to lower fees and there were no guarantees the British Grand Prix would remain on the calendar.

In the past few weeks the prospect of a London Grand Prix, repeatedly raised by Liberty as something they would like to host, proved to be a sticking point because of its potential commercial rivalry to Silverstone. The deal has addressed this concern to the satisfaction of both parties, however.

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“We are concerned about the potential threat of us having a competitor on our doorstep,” Grant said. “F1 understand those concerns and we have a set of arrangements to protect our interests should that become a reality.”

Grant would not elaborate further but he noted: “We think there is room for two races to coexist side by side as long as they have sufficient separation in time and as long as our commercial interests are recognised in some reasonably flexible way.”

The chairman of British racing’s governing body Motorsport UK, David Richards, also welcomed the decision. “With such a strong following of motorsport in the UK and such a strong industry here the halo affect of the British Grand Prix is not to be underestimated,” he said.

“The investment that has gone into Silverstone in recent years is colossal and it provides a legacy for all other forms of motorsport in the UK and that is important.”