The head of McLaren has warned teams will be forced out of Formula One because of the financial impact of Covid-19 if the sport does not take decisive action.

Team principals, F1 and the FIA are to hold a critical virtual meeting on Thursday to discuss lowering the budget cap and Andreas Seidl demanded they must act on what he called the “final wake-up call” for F1.

“The biggest risk I see is that we lose teams if we don’t take very decisive action,” he said. “It is not just a fear, it is reality. There is a big risk we could lose teams through this crisis. We don’t know what the income will be this year. We don’t know when we will be racing again.”

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The opening nine races have been called off and F1 is facing a major financial shortfall. The budget cap set to be imposed next year was $175m.The teams have already agreed to cut it to $150m but Seidl believes it must be slashed to $100m to ensure long-term sustainability and more competitive racing.

The key players met last week but failed to come to an agreement. The president of the FIA, Jean Todt, has said it is crucial they do so on Thursday and Seidl concurred: “The crisis we are in now is the final wake-up call that the sport, which was unhealthy before and not sustainable, has now reached a point where we need drastic changes. The most important thing is we make the next big step on the budget cap because of the financial losses we will face this year.”

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The next scheduled race is the French Grand Prix on 28 June. It is almost certain to be cancelled after Emmanuel Macron said no public event would take place until mid-July.

Seidl acknowledged it was feasible no racing would take place this year. “For all teams it is already a serious problem. Everyone on the grid understands we are in a big crisis and we need to make some big, bold decisions to protect the teams and the sport.”

Seidl said health concerns remained paramount. Protecting personnel, travel guidelines, as well as the position for promoters were all factors, alongside ensuring F1 was not endangering any recovery from the outbreak. “What is important is the public acceptance of events happening again,” he said.