Formula One is a mess but the sport is failing to even acknowledge it has a problem, according to John Watson. The former driver, who won five grands prix and is now better known as a commentator, said major changes are needed to save the sport.

Before the season got under way in Australia earlier this month, the sport’s chief executive, Bernie Ecclestone, had to help out some struggling teams with an injection of cash but Watson was still a disappointed spectator in Melbourne where a quarter of the 20 cars were missing from the grid and there were only 11 finishers.

“Formula One has a major problem but the sport is putting its head in the sand,” he said. “Two thirds of the grid are struggling, and barely able to make it to the race. Right now F1 needs to have a good look at itself and decide what it is trying to achieve. The product is in need of a massive kickstart.

“What’s going on? Bernie Ecclestone has done a phenomenal job for [owners] CVC but somebody needs to step in because of the dire state the middle and bottom of the grid is in. You can’t have a race with just four big teams. I’m unhappy with the governance from the FIA.”

In the buildup to the start of the season in Melbourne, the headlines were dominated by Sauber, who at one point seemed likely to have their cars taken away by bailiffs, and Manor, whose cars were in pieces and unable to run at all.

“I feel sorry for the organisers of the Australian Grand Prix,” Watson said. “They put on probably the best race of the season. It’s a brilliant event but the week of the race all the stories were about Giedo van der Garde and his contract with Sauber. Sauber made a mistake and it was an indication of how desperate some of the teams in Formula One are.

“And then, in the race, there were so many cars and drivers missing. Australia values what the race brings to Melbourne and Victoria. They love their sport there but they will make their views known about that event, and it was not a good grand prix.”

Watson says F1’s efforts to cut costs have created problems of their own. “The regulations do not allow you to produce an entirely new engine this year, so the teams have to make the most of their development token. But that means that Mercedes, who have got everything spot on, are now enjoying complete domination. Another problem has been the reduction in testing time, again to cut costs. And this season teams have only four engines instead of five. So no one wants to do mileage because of the meagre engine allowance. Yet these hybrid engines are so complicated that everybody needs track time. Half the problem is bloody procedures. It’s nuts, total nuts.”

Watson, like many people in Formula One, wants CVC to readdress the amount of money it is taking out of a sport with an annual turnover of £1.5bn, while the majority of the teams struggle for survival. “That’s an area that must be revisited to keep the sport worthy of the money people are paying to watch it, either at the track or on TV.”

Watson also took a sideswipe at Red Bull’s team principal, Christian Horner, who in Australia was outspokenly critical of the Renault engine. “What Christian said about Renault was outrageous,” Watson said. “Has the bloke lost the plot? There were some unnecessarily blunt comments about the Renault power unit. You should keep those remarks for meetings behind closed doors.

“Renault are spending a fortune supporting the technology and the hardware to enable Red Bull to continue the success they have enjoyed. If I was Renault I would feel pissed off that Christian has bit off the hand that’s feeding him. The relationship seems to be disintegrating very rapidly. The public sniping is inappropriate and counterproductive.”

Watson, 68, was also critical of McLaren when he said: “They’ve had two bad years with the Mercedes engine. It’s hard to understand why they didn’t do better when you see how well Williams, Force India and of course Mercedes themselves did.”

As the Formula One teams fly to Malaysia for the second race of the season at the Sepang circuit on Sunday, Watson is not optimistic that the warring teams will get together to help save the sport. “F1 needs to get out of the hole it’s in but the trouble is the teams are all playing political games. To get teams to agree to anything they all want something back.

“Some of the teams haven’t got the wisdom to realise that they might have to give up something to save what has been such a fantastic sport for the last 40 years. There is too much self-interest.”