The management of Silverstone is considering dropping the British Grand Prix due to the increased cost of running it.

ITV News has seen a letter from the chairman of the British Racing Drivers' Club (BRDC) - which owns the racing track - to its members spelling out the "potentially ruinous risk" of continuing to host an event that is loss-making.

The BRDC has a contract with Formula One to host the British GP until 2026 but is considering activating a break clause.

In the letter dated December 19th, the BRDC chairman, John Grant, expressed a wish to "preserve the BGP" but told members "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.

"This is not a simple decision, and we will consider fully all the implications before coming to a conclusion by mid-year."

Part of the letter seen by ITV News from the BRDC chairman. Credit: ITV News

The last Grand Prix held at Silverstone in July 2016 attracted 139,000 fans to the circuit and was won in dramatic circumstances by a British driver, three-time world champion Lewis Hamilton.

It was an organisers' dream but Grant reveals the event still "fell short of budget".

The same race in 2015 ended up costing Silverstone £2 million.

As it stands Silverstone pays a fee of almost £18 million a year to F1 to stage the race - a figure that rises by 5% annually.

In return Silverstone keeps ticket sales and a proportion of hospitality money but doesn't not share the considerable broadcast or sponsorship revenues.

The history of Grand Prix racing revolves around the circuit. Silverstone hosted the first F1 world championship in 1950 and has been the permanent home of the British Grand Prix since 1987.

Many F1 teams are also based in the UK.

A row between the British Racing Drivers Club and Formula One over the cost of hosting the race blew up in 2003 and again in 2009 when Bernie Ecclestone attempted to move the event to Donington, a move that eventually fell through.

A new 17 year contract to keep the race at Silverstone was signed in 2009 but both sides have the option of break clause.

Britain's Lewis Hamilton has won the past three F1 races at Silverstone. Credit: PA

The accounts of Silverstone Circuits Ltd, filed at Companies House, show that the race track is making persistent losses.

In 2015 the company lost £5 million on turnover of £55 million and underwent a capital restructuring. In the circumstances, it's hardly surprising that BRDC is looking to pulling out.

The F1 contract is Silverstone's biggest but, in his letter, the chairman of the BRDC claims that "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".

John Grant claims Silverstone stages enough other events to "absorb... even the loss of the British GP after 2019".

Tonight Sir Jackie Stewart, a former president of the BRDC and a three-time F1 champion who won two British Grand Prix at Silverstone, told ITV News the threat to back out of the contract was "credible", that no other circuit in Britain was currently capable of hosting the race and if Britain lost it, a lot of jobs would be lost.

Sir Jackie called on the Government to intervene financially to ensure the race lasts beyond 2019.

Bernie Ecclestone, chief executive of the Formula One Group which manages Formula One, said: "If they want to activate a break clause, there is nothing we can do.

"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."

Silverstone declined to comment on the letter but said the 2017, 2018 and 2019 races are not under threat.