Henkel issued legal proceedings against Brawn GP, now purchased and renames as Mercedes GP, in November, claiming a three year sponsorship deal was invalid, having been signed by a former employee without permission.

Henkel said Brawn had signed the contract with ERE BV, a Dutch company owned by Willy Luchs, a German who was convicted of fraud in the 1990s, with the assistance of Kai von Bargen, a former middle manager at Henkel responsible for sponsoring activities. Henkel budget around £1.8m (€2m/$2.8) a year on sponsorship activities, far less than the £25m (€28m/$40m) 'agreed' with Brawn.

The problem was brought to the teams attention in September, but remained unresolved. However, a statement issued today draws a line under the situation.

"Brawn GP announced today that the differences between Brawn GP and Henkel with regard to a Formula 1 sponsorship have been resolved by mutual agreement. All potential claims will be dropped. As a consequence, all court proceedings will be withdrawn.

"The new Formula 1 Team Mercedes GP Petronas together with the colleagues from the former Formula 1 Team Brawn GP will continue to cooperate with the Prosecutor's Office and assist in the further clarification of the matter."

No further details will be forthcoming as all parties have agreed on confidentiality.