The prospects of the Volkswagen Group entering Formula 1 could be scuppered by the news that Martin Winterkorn is to resign as its chief executive in the wake of the US car emissions scandal.
Winterkorn was known to be the driving force behind a bid to convince Volkswagen board members to sign off a move into F1, a passage made clearer by former chairman Ferdinand Piech – who was against the proposal – exiting the firm earlier in the year.
However, the revelation that the world's largest car maker manipulated US diesel car emissions tests to give more positive results has claimed its first victim in Winterkorn, who said the company needed a 'fresh start' to rebuild consumer confidence even if he insists he had no knowledge of the wrongdoing.
The news is a swift and potentially decisive blow to the suggestion that VW could finally green light a move into F1 at least in the short-term, particularly as it says it will be setting aside £4.7 billion to cover costs of the scandal and has already had upwards of 40 billion euros wiped off its value on the stock market.
News broke over the Singapore Grand Prix weekend that VW was close to a deal to take over Red Bull Racing's F1 effort from 2018 and was set to construct its own power unit, only for the scale of the emissions scandal to emerge too.
The BBC F1 chief analyst Eddie Jordan said last week the agreement would have seen VW buy the team and build its own engine, while Red Bull continues as a major sponsor.
Jordan says a VW engine would not enter F1 until 2018 and Red Bull would use Ferrari power in the interim. The team will split with current engine partner Renault after this season, ending their contract a year early.
"Red Bull and VW have been in on-and-off talks for more than a year and I understand that the fundamentals of a deal for the sale of the team have been agreed," said Jordan.
"An arrangement whereby VW would take it over, becoming the fourth major manufacturer in F1, and Red Bull would continue to enjoy the high profile that comes from a major sponsorship suits both parties."
It is not clear which of the VW Group's brands would be promoted in F1, although Audi is the favourite.
The company also owns the Porsche, Lamborghini, Bugatti, Bentley, Seat and Skoda marques.
Red Bull boss Dietrich Mateschitz told his company's Speedweek website on Friday that his team's split from Renault was concluded "a few weeks ago".
He said using a Ferrari engine would be "a very acceptable solution for the next two or three years" but a contract with the Italian company was not finalised.
Any VW deal would represented a triumph for Martin Winterkorn, the chairman of the VW board of directors, in an internal power struggle.
Winterkorn had agreed the deal with Mateschitz and the drinks giant's motorsport adviser Helmut Marko.
VW and Red Bull have long-time links and are currently partners in the world rally championship and Dakar Rally.
BBC Sport reported that agreed a deal to buy out Red Bull last winter but the plan was vetoed by former VW Group chairman Ferdinand Piech.
Piech was ousted in a boardroom power struggle and resigned in April.
In May Marko said: "If we don't have a competitive engine in the near future, then either Audi is coming or we are out."
Red Bull team principal Christian Horner has consistently denied that the team have held talks with the VW Group.
The German media is now reporting Porsche boss Matthias Mueller will be named as Winterkorn's replacement on Friday.
