Monte Carlo  - The Formula One budget row is a step closer to being solved, English newspapers reported on Saturday.

The reports said that talks at the Monaco Grand Prix in Monte Carlo were moving closer to a compromise on the controversial issue over which Ferrari and others have threatened to quit F1.

Friday saw several meetings to discuss the ongoing controversy surrounding a budget cap of 45 million euros (61 million dollars) proposed a few weeks ago by the president of the sports governing body FIA Max Mosley.

The cap is not mandatory, but teams which keep to it will have technical freedom in areas such as engines and aerodynamics, while teams which spend more money face restrictions.

The Formula One Teams Association (FOTA) met amongst themselves on Friday and then had a meeting with Mosley in an attempt to iron out the differences.

The Times said Saturday that Mosley was apparently willing to make some compromises if the teams were to accept the budget cap in principle.

The 2010 engine costs, as well as driver salaries, marketing budgets and other non-car performance related costs are not included in the cap and Mosley apparently is willing to extend the engine costs until 2013.

Mosley was quoted as saying: "We had a good constructive meeting and there will be ongoing discussions. I'm always confident there'll be agreement."

It is believed that only Ferrari and Toyota are continuing to strongly oppose the budget cap, with Ferrari president Luca di Montezemolo saying that they wanted Formula One to stay as Formula One.

"We do not want it to become something different and go towards constant changes which confuse the public and all the others. What we want is stability and that we work over the next two years to arrive at a way of further reducing costs," the Guardian quotes him as saying.

Ferrari had earlier said they would consider withdrawing from the sport if the cap is pushed through.

Teams have until May 29 to decide if they want to apply to race next season. Apart from Ferrari, Toyota, Renault, BMW-Sauber and Red Bull have said they would consider withdrawing from Formula One if the rule is not scrapped. (dpa)