Paris  - Motorsport governing body FIA wants Formula One team to operate within a budget cap of 40 million pounds (59.3 million dollars) from 2010 under new cost-cutting measures announced Thursday.

Teams who work within the budget will be given greater technical freedoms and out-of-season testing, FIA said.

The voluntary cap will not include marketing and promotion, driver and young driver programmes and engine costs for 2010.

The cap has been increased from 30 million pounds after opposition from some of the car manufacturers who invest far more in their F1 teams than private investors.

"In order to attract manufacturer owned teams to take up the cost-capping option, the FIA have decided to exclude engine costs for 2010 (only)," a statement said.

The FIA also agreed to increase the number of drivers next season to 26, the equivalent of three more teams.

"The FIA believes that unfettered technical competition is part of Formula One's DNA, and would like to see this flourish, but in an environment of strong, responsible and innovative management, not a spending race. For these reasons cost capping is preferred," the FIA statement said.

With the budget cap at 40 million pounds, FIA said it believed 70 per cent of the grid could generate a profit.

"This transforms the business case for owning a Formula One team, for both manufacturers and private investors. The desired net result is to have a very healthy commercial environment for present and new owners," FIA said.

"We also had a good look at costs, and believe that 40 million pounds in combination with greater technical freedom will allow engineers to create Formula One cars even more interesting and exciting than today's cars."

A cost commission will monitor the budget cap. The international sporting code will cover transgressions but there will be no "fixed penalties." The cost commission will judge the degree of misdemeanor and advise the FIA, who will determine any penalty.

Speaking Wednesday, FIA president Max Mosley said: "The budget is a little bit more than 30 million pounds, but it's important we get it in place because if not then we are going to lose a lot of the teams.

"People cannot, in the current economic conditions, get enough money to survive without that."

Asked whether there had been any response from Ferrari, which had been a critic of the cap, Mosley said it might find the new cap attractive.

"Like everybody else they need to save money, they have to think of their shareholders' money and not just spend like in the old days," he said.