A crisis that was threatening to rip formula one apart eased dramatically on the day of the Monaco grand prix.

A crisis that was threatening to rip formula one apart eased dramatically on the day of the Monaco grand prix.

Teams held a meeting in the Renault motor home, and later on FIA president Max Mosley was willingly telling reporters that a solution to the budget cap dispute is in sight.

It is rumoured that the mood of reconciliation may have been triggered by McLaren indicating that it too - like Williams, Brawn and Force India - fully intends to meet the May 29 deadline for 2010 entries.

Mosley told more than one news outlet on Sunday that he now expects all teams, including the previously furious Ferrari, to lodge their paperwork by Friday.

It is believed that all sides - the governing and commercial bodies as well as the FOTA team alliance - have made concessions and now agreed in principle to a scenario for 2010 and beyond that safeguards the future of the sport.

Rumours suggest that Mosley is willing to give teams until 2011 to come down to his 40 million pounds sterling budget cap, while teams have agreed on caps of their own -- such as on the number of staff allowed at factories.

"Quite a lot of progress has been made because we can see solutions now. I don't think there is any fundamental diversity of view," Mosley said.

Ecclestone is believed to have agreed to release more commercial revenue for the teams, while on the thorny issue of governance, the F1 Commission may be reconvened so that teams have more say on the implementation of rules.

On the mechanics of the budget cap, Mosley said a higher than 40m figure could be set just for 2010. "That's something under discussion. It is a possibility," the 69-year-old Briton admitted.

Niki Lauda described the mood in the Monaco paddock as one spurred by a "face saving compromise".

This crisis may be nearing an end, but Mosley suggested that even when all the genuinely concerned parties are placated, "one or two" carmakers are likely to quit the sport anyway due to the worldwide recession.

F1 chief executive Bernie Ecclestone doesn't want Ferrari to depart, but he suggested that the grid will still shine even without a couple of the other big names.

"Look at Honda," he told Germany's Welt am Sonntag newspaper. "They went a few months ago and now the word on everyone's lips is Brawn."