The future of Bernie Ecclestone in Formula One has been thrown into doubt after the sport's chief executive and commercial rights holder was charged with bribing a German banker.

Ecclestone, who will be 83 in October, announced on Wednesday that he had been indicted by German prosecutors following his payment of $44m (£29m) to Gerhard Gribkowsky of Bayern Landesbank to smooth the sale of a 47% stake in the sport to its current owners, the private equity company CVC Capital Partners, in 2006.

Last year Gribkowsky was jailed for eight and a half years for not paying tax on the payments, breach of trust towards his former employers and being in receipt of corrupt payments from Ecclestone.

Ecclestone, who has always insisted that he was not guilty of any wrongdoing, admits making the payment to Gribkowsky. He said he had been "shaken down" by Gribkowsky, who had threatened to go to HM Revenue and Customs with "false evidence", claiming that he was more involved in the running of his family trust, Bambini Holdings, than he should have been.

Ecclestone, the former used car salesman who is worth an estimated £4bn, confirmed the news of his indictment on Wednesday when he said: "I have just spoken to my lawyers and they have received an indictment. It's being translated into English."

His Düsseldorf lawyer Sven Thomas, said: "The clear viewpoint of the defence remains, that Mr Ecclestone is guilty neither of bribery or of participation in embezzlement".

The news broke as Ecclestone's representatives attended a court hearing in London to fight claims by Constantin Medien, the media company, who says it lost out by $171m because F1 was undersold.

Ecclestone added: "We are defending it properly. It will be an interesting case. It's a pity it's happened."

He described the serving of the indictment as "inevitable," adding: "If someone wants to sue you, they can do it and you have to defend it."

He said in May: "The problem is that when you pay someone, it's always there. I'd never been in a position where someone could cause so much damage. I had to keep him close to keep him quiet. Or else cut his tongue out."

If found guilty, Ecclestone could be jailed for 10 years. He said in May: "The board [of CVC] agrees I should stay unless I'm convicted." Earlier, he said: "[CVC] will probably be forced to get rid of me if the Germans come after me. It's pretty obvious, if I'm locked up."

But even without a conviction, Ecclestone has enormous problems. The prospect of a lengthy court battle – which is unlikely to take place before the end of the year – would be a damaging distraction for a sport which boasts an annual income of £1.5bn. Only football has a bigger global TV audience. The $12bn (£8bn) flotation of F1, already postponed once and now planned for Singapore this autumn, could be put off again.

There is much speculation in Germany that based on similar financial crime cases and due to Ecclestone's advanced age, it is possible that he will be offered the chance to reach an out-of-court settlement.

Ecclestone also faces civil actions in Germany and America, and could be handed an enormous bill if investigations into his tax affairs go against him.

Ecclestone once said: "In Formula One, everyone cheats. The trick is not to get caught."

In December the Ferrari president Luca di Montezemolo said: "If Bernie is charged I think he will be the first to step back in the interests of Formula One. This could be bad for F1."

Some team bosses – and most of them have been loaned money by Ecclestone when in trouble – remain fiercely loyal to him, at least in public. Others point out that the man who once described women as "domestic appliances" and praised Hitler for being "able to get things done" is an anachronism in the 21st century.

They also claim that largely because of Ecclestone the sport has done little to embrace new technology. Then there is the argument that most of the profits made by Ecclestone for his employers, CVC, are not seen by the teams and what money there is unfairly distributed. All but a handful of the 11 F1 outfits – Ferrari, Red Bull, Mercedes and McLaren – are in some form of financial difficulty.

Among those suggested as possible replacements for Ecclestone are Justin King, the Sainsbury's boss, and Richard Scudamore, the chief executive of the Premier League.

The most likely replacement, though, would be Christian Horner, the man who has led Red Bull to a hat-trick of drivers' and constructors' world championships. Horner is the team principal closest to Ecclestone and has also been the most successful in recent seasons.

But everyone in the F1 paddock agrees that there is no like-for-like replacement for Bernie Ecclestone.