The future of the British Grand Prix at Silverstone has been called into doubt, after the circuit’s owners, the British Racing Drivers’ Club, revealed that hosting the Formula One event, one of the acknowledged classics on the calendar and a race that has been ever-present since the world championship began in 1950, is becoming financially unfeasible.

The BRDC chairman, John Grant, is reported to have highlighted in a letter to members the “potentially ruinous risk” of continuing to hold the race at the Northamptonshire circuit.

The BRDC has a contract with the Formula One Group to stage the race until 2026 but has the option to exercise a break clause that would come into effect at the end of 2019. Grant added the board is considering the implications of withdrawing and would reach a conclusion by the middle of this year, although this year’s grand prix on 16 July would not be affected.

Silverstone has held the race since 1987 but in the letter, which has been seen by ITV News, Grant warned: “The board is considering whether we should give notice before the 2017 BGP (as required) of our intention to exercise the break clause in the BGP contract at the end of 2019. We have to protect our club against the potentially ruinous risk of a couple of bad years.” He added: “Even in a good year, the BGP does not generate enough cash to cover its share of the site overheads, our major concern has always been the risk of a bad year.”

The hosting fees for races charged by Formula One have risen drastically over the past two decades, with increased costs often being met by governments or regional authorities looking to the sport for promotional purposes. Silverstone enjoys no such benefits.

The event, however, is still hugely popular, noticeably so at a time when audiences in other traditional motor racing markets such as Germany have seen a sharp decline. Last year’s grand prix was attended by 139,000 fans, who saw Lewis Hamilton take the win to huge acclaim. That number that was itself up on 2015, with the circuit pursuing innovative and more attractive pricing policies. However, Grant stated the race still “fell short of budget”. Hosting the race in 2015 cost Silverstone £2m.

The circuit’s relationship with the F1 chief executive, Bernie Ecclestone, who has aggressively pursued high fees as a source of income for the sport, has not been smooth. Ecclestone was long a critic of the facilities, which were comprehensively upgraded in 2011 at the BRDC’s expense. Costs were a problem in 2003 and 2009, the latter when Ecclestone tried to move the race to Donington Park.

Ecclestone confirmed Silverstone could drop the grand prix. “If they want to activate a break clause, there is nothing we can do,” he said. “Two other tracks have contacted us and we are keen to keep a British Grand Prix, there is no doubt about it, we want to have one. As far as Silverstone is concerned, it’s not in our hands.”

Sir Jackie Stewart, the three-times world champion, told ITV News the threat to back out of the contract was “credible”, pointed out that no other circuit would currently be able to host the race and called for government intervention to ensure the race remained on the F1 calendar.

“You talk to anyone anywhere and say Silverstone and they think Formula One – so to lose it would be a terrible thing for this country,” he said. “Silverstone is in the middle of country. It’s in the right place. There’s no other race track that would be able to host the British Grand Prix. I think it’s a credible threat and not impossible for it to happen.”

Stewart was the chairman of the BRDC in 2004 when the event was cancelled for the following year after a failure to come to an agreement with Ecclestone. But Stewart feared that despite the UK being the home to many of the teams, most within a short distance of Silverstone and including world champions Mercedes, a German marque, it could become a reality again if public money was not invested.

“If I were speaking [to the government] I would say, have a look at what motorsport has done for this country, look what the industry provides for this country in employment, why should the might of Germany not be able to make the F1 car in Stuttgart? Because the people and technology are here,” he said.

“It is expensive, but in other countries in the world, in most cases the government have assisted financially but that hasn’t happened in Britain. And yet we employ about 140,000 people in the motorsport industry in UK.

“The government should be giving to F1 and motorsport in general, in the same way that they’ve given to swimming, cycling, rugby, cricket, and other sports. We need help and we need government help.”

The BRDC declined to comment on the letter but did confirm that race would go ahead at Silverstone from 2017-19.