The Formula One grand prix is staying at Albert Park, despite reports the state government is looking at alternative circuits in and around Melbourne, says a government spokesman.

The government today revealed it had signed an agreement with the Confederation of Australian Motor Sport (CAMS) and Calder Park Management to examine a possible upgrade of the track to host top-level drag racing and other forms of motor racing.

Australian driver Mark Webber signs autographs for fans at the Australian Formula One Grand Prix at Melbourne's Albert Park earlier this year. Credit:Paul Rovere

But a spokesman for Tourism Minister Tim Holding said that didn't mean the government was looking for alternative venues for the Melbourne grand prix.

"The Formula 1 grand prix is staying at Albert Park," said the spokesman, Luke Enright.