The small teams in Formula One face the threat of imminent extinction following the decision to embrace customer cars, taken at a meeting F1’s Strategy Group in Biggin Hill on Thursday.

Those teams, including Lotus, Sauber and Force India, have been pleading for an end to the grossly unfair payment structure that favours the bigger teams. They even threatened to boycott last year’s US Grand Prix in Austin.

Instead, the Guardian understands, the sport has decided to turn its back on the small constructors and the big beasts, Mercedes, Red Bull, McLaren and Ferrari, have been given the go-ahead to become stronger still by supplying other F1 competitors with cars and engines.

The decision is likely to lead to a two-tier grid with the big four teams, further enriched by their extra income, breaking away from other competitors. And it is likely to spell the end for the smaller, independent constructors, including some of the most evocative names in F1, and that is totally against the fabric of a sport in which the smaller teams have always had the chance to topple the giants.

Magnificent victories against the odds, such as Damon Hill’s in a Jordan at the 1998 Belgian Grand Prix, are now likely to become a thing of the past as the sport becomes further polarised.

The Strategy Group is made up of F1’s chief executive, Bernie Ecclestone, the FIA president, Jean Todt, and the six big teams – Ferrari, Mercedes, Red Bull, McLaren, Williams and Force India, who have replaced Lotus from last year.

The meeting was called to discuss the future of F1 against a background of falling TV and live audiences as well as declining sponsorship, with a number of teams struggling to make it to the grid on Sunday afternoons because of the colossal costs. But the teams have been unable to agree on cost-capping.

There were many items on the agenda, including the future of hybrid engines and the regulations for 2017. But the major decision to come out was to endorse customer cars.

The news will dismay the smaller teams. When the topic last came up for debate Sauber’s team principal, Monisha Kaltenborn, told Autosport: “It’s not at all a good idea. I cannot even follow the argument that it’s going to reduce costs.

“Formula One is about constructors. F1 needs in its DNA this challenge. It’s never been any different. People like to see a Williams and Force India come really close to beating a really big team.” On Wednesday the Lotus team said it was not for sale, following speculation over its engine supplier.