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Max Mosley, the head of the FIA (Formula 1’s governing body) has agreed to scrap the Two-Tier system he had proposed for the series starting next year.

Ferrari has officially declared that if FIA president Max Mosley intends to go through with his plan for a two-teared budgetary system in Formula 1 he can count the prancing horse out.

In a statement Ferrari’s board of directors declared that if the FIA goes ahead with it’s plans, “then the reasons underlying Ferrari’s uninterrupted participation in the World Championship over the last 60 years – the only constructor to have taken part ever since its inception in 1950 – would come to a close.”

The board blasted Mosley stating that, “The rules of governance that have contributed to the development of Formula 1 over the last 25 years have been disregarded, as have the binding contractual obligations between Ferrari and the FIA itself regarding the stability of the regulations.”

Ferrari is the first manufacturer to officially declare it would pull, after Toyota, Mercedes-Benz and BMW have made remarks that they might pull. Red Bull Racing and Scuderia Toro Rosso team owner v has also declared a boycott if Mosley goes ahead with his new rules.

As the most popular and marketable team in Formula 1, Ferrari’s threat is akin to the Yankees quitting baseball.

What exactly this new rule setup includes is a two-tiered setup with some teams spending an unlimited amount of cash to compete while other teams would have a £40 million  cap – not including driver salaries, marketing, engines or fines. Teams in the £40 class could use adjustable front and rear wings and have engines with unlimited revving capabilities.

There is speculation that the adjustable aerodynamics might provide an advantage that no amount of money spent on engineering could exceed, making high-dollar teams uncompetitive.

As well as practical reasons, Ferrari opposes the FIA’s two-tiered system in principle.

“The same rules for all teams, stability of regulations, the continuity of the FOTA’s (Formula One Teams Association) endeavours to methodically and progressively reduce costs, and governance of Formula 1 are the priorities for the future,” reads the statement. “If these indispensable principles are not respected and if the regulations adopted for 2010 will not change, then Ferrari does not intend to enter its cars in the next Formula 1 World Championship.”

The board of directors also asked that Ferrari’s many fans understand that the decision not to race in 2010 under the current rules was a difficult one but that it is consistent with Ferrari’s racing principles.

Official release after the jump: