Business leaders and politicians in west Oxfordshire say that Renault F1's decision to support the Formula One organisation will safeguard 500 Oxfordshire jobs.

In a bid to frustrate moves to form a breakaway competition, the Renault F1 team, based at Enstone, is to sign an agreement with the Formula One Administration (FOA) which will keep it in F1 racing beyond 2008.

Leader of the West Oxfordshire District Council Barry Norton said: "We're proud to be host to the world champion, who drives for Renault.

"Anything which stabilises the industry and its spin-offs has to be good news."

A spokesman for Renault said the team's announcement confirmed it had reached a commercial agreement for TV rights which will run retrospectively from 2006.

He added: "There has been a perception of uncertainty over the future of jobs from people outside.

"Within the team, though, we have always known that we had a winning formula and that we had what it took to stay ahead."

The agreement will lead to new co-operation with the Formula One organisation which will run from 2008-2012.

Keith Slater, of the Oxfordshire Chamber of Commerce, said: "It's good news. Oxfordshire is a centre of excellence in the motor racing business, and it's good to see it prosper."

Renault also employs 250 people in Paris. Renault team president Alain Dassas said: "The agreement the team has reached with FOA expresses the Renault F1 Team's commitment to Formula 1."

Other motor racing teams around Oxford - Williams F1 in Grove, Super Aguri in Leafield, and Honda in Brackley - have already committed themselves to supporting the FIA.

The announcement from Renault came hot on the heels of the victory at the weekend in the Spanish Grand Prix of their driver Fernando Alonso, who lives in Oxford.