Quite apart from the sentimentality, the loss of the British Grand Prix at Silverstone will mean an economic blow to Britain's motor sport industry.

Built on a former airfield in Northamptonshire in central England, Silverstone hosted the first grand prix of the modern era in 1950. The course has staged the British race 38 times, including the last 18 in a row. Before that, the race alternated between Brands Hatch and Aintree.

But the British grand prix was dropped from formula one's provisional 2005 calendar yesterday after the owners of the circuit failed to meet the financial demands of Bernie Ecclestone, the head of F1. The British Racing Drivers' Club (BRDC) was £3m short in its offer to keep the race, considered one of the "crown jewels" of the British sporting calendar.

For Mr Ecclesone, new potentially more lucrative markets beckon, a point brought forcefully home by last Sunday's highly successful Shanghai grand prix. Another "old world" circuit that faces the axe is the French grand prix at Magny-Cours when Mr Ecclestone presents an expected list of 17 races for next season, including a grand prix in Turkey for the first time.

Mr Ecclestone says there is little chance Silverstone can be saved before the 2005 calendar is ratified in Paris in a fortnight's time. The BRDC, led by former three-time F1 champion Jackie Stewart, said it could not afford Mr Ecclestone's financial terms or meet his demands that Silverstone's facilities be upgraded to match the state-of-the-art facilities at venues such as Shanghai and Bahrain.

"It will inflict serious damage to the pre-eminence of the sport and industry in the United Kingdom which may be irrecoverable," the BRDC warned today.

According to the Motorsport Industry Association, 4,000 companies are involved in Britain's motor sport industry, generating some £4.6bn a year and employing some 40,000 people. The race itself is worth £30m a year to the area around Silverstone.

This is the latest blow to the British motor industry after Ford's decision last month to effectively cease production of Jaguar cars in Coventry with the loss of 1,150 jobs.

Now it is the turn of the UK cottage industry based around formula one. Seven teams are based in Britain with three - Jaguar, Jordan and Minardi - facing an uncertain future already. Former formula one champion Nigell Mansell called the decision "an utter disgrace."

"This is a dreadful loss, not just for Britain, but for formula one in general," he said. "I can't imagine formula one without a British grand prix. But if the race is axed, I will be disgusted."