The Lotus Formula 1 team is facing the threat of possible legal action over its rebranding as 'Team Lotus' next season, as the row over the team's name moved up a gear on Monday.

Group Lotus parent company Proton said it would take 'all necessary steps' to protect its brand after claiming that Lotus F1 boss Tony Fernandes has no right to use the 'Team Lotus' name in Formula 1 next year.

Fernandes announced at the Singapore Grand Prix that he had acquired the rights to the 'Team Lotus' name from its previous owner David Hunt, and that he intended to rename his team for the 2011 season.

But in a statement issued on Monday, Proton said that it believed that Group Lotus was the owner to all rights surrounding the 'Lotus' name in the automotive sector - which included F1.

It suggested therefore that use of the 'Team Lotus' name in F1 would be a breach of its own rights.

The Proton statement said: "Last year, Tony Fernandes and 1 Malaysia Racing Team recognised this by taking a licence from Group Lotus to use the "Lotus" brand for the "Lotus Racing" team in the current Formula 1 season.

"With Proton's agreement, Group Lotus has now terminated its licence to 1 Malaysia Racing Team to use the "Lotus Racing" brand in the 2011 and future Formula 1 seasons as a result of the flagrant and persistent breaches of the licence by 1 Malaysia Racing Team, which were damaging to the "Lotus" brand.

"Following that termination, neither 1 Malaysia Racing Team, nor any other company associated with Mr. Fernandes such as Tune Group Sdn Bhd or Team Lotus Ventures Limited, has the authority of Group Lotus to use any "Lotus" brand in the 2011 Formula 1 season. This includes the use of the brand "Team Lotus".

"Group Lotus understands that Mr. Fernandes intends to rebrand the current "Lotus Racing" Formula 1 team to "Team Lotus" for the 2011 Formula 1 season. Mr. Fernandes indicates that Tune Group has acquired the rights to the name "Team Lotus" from a business formerly owned by David Hunt called Team Lotus Ventures Limited.

"roup Lotus believes these rights to have no proper legal foundation, a fact of which Mr. Fernandes was well aware when his company purchased them.

"PROTON will support Group Lotus in taking all necessary steps to protect its rights in the "Lotus" name, including resisting any attempts by Mr. Fernandes or his companies, or any other unauthorised person, to use the "Lotus" name in the 2011 Formula 1 season."

The growing dispute between the Lotus Group and Fernandes became clear last week when the road car company announced that it was sponsoring the ART GP2 team next year - in direct competition to Fernandes' own AirAsia outfit.

Proton's chairman Dato' Sri Mohd. Nadzmi Mohd made it clear that the company would do all it could to ensure that Fernandes did not run under the Lotus banner next year.

"We believe the Lotus brand to be one of the most valuable brands in Formula 1 today," he said. "We are the owners of this brand, and will take all necessary steps to protect it.

"Tony Fernandes has no rights to use the Lotus brand in the 2011 Formula 1 season, and we will strongly resist any attempts by him to use our brand without our permission and will withdraw our sponsorship of the Lotus Racing team."

"To put it simply, Group Lotus is everything Lotus. The fact that 1 Malaysia Racing Team entered into an agreement with Group Lotus to use the brand means that both Mr. Fernandes and 1 Malaysia Racing Team recognises and acknowledges Group Lotus' rights."

This Friday has been marked out as a likely turning-point in the Lotus naming dispute.

Finland's Turun Sanomat reports that Nov. 19 could see a settlement in the dispute, with Tony Fernandes' team wanting to keep its name but the separate Group Lotus looking to enter F1 with a Renault collaboration next year.

Indeed, it is believed that Proton-owned Group Lotus is scheduling an official announcement about its F1 project for 2011 this week.

At the same time, Fernandes is hinting that a decision has been made about how his team should proceed. "(Shareholders) Nasa, Din and myself know what to do. We are the people's team," he wrote on Twitter.

It seems likely that the matter will not become a messy court battle.

"What we don't want to be involved in is destroying the Lotus name," Fernandes is quoted by Reuters.

"We feel that we've done justice to the Lotus name. We want to keep it. We feel it's ours. But we are also pragmatic human beings," he said.

And the team's technical boss Mike Gascoyne told Turun Sanomat: "I don't know what the name will be in the future, but that's not the important thing.

"I'm proud of the team and we've proved this year how strong we are. And at least one thing can never be taken away from us: We brought Lotus back to F1."

Group Lotus initially signed a deal with Fernandes allowing his F1 team to race under the Lotus Racing name in 2010, the team's first season in F1.

Since then, the team owner has agreed another deal with David Hunt, who required the rights to Team Lotus in 1994 when the team went under, to use the 'Team Lotus' name as of next season.

However, Group Lotus are now disputing Hunt's right to sell Fernandes those rights.

But despite the on-going battle, when the FIA released the official 2011 F1 entry list earlier this week, the team's name was listed as 'Team Lotus'.

And Fernandes insists he will continued his fight to use it.

"Well we made the call after tremendous support from (the) public," he Tweeted.

"Team Lotus it is.

"Sure there will be many battles ahead but (team base) Hingham is pumped.

Car manufacturer Group Lotus, owned by the Malaysian car company Proton, has announced a deal to become title sponsor in a rebranded team called Lotus Renault GP Team.

Renault, which have sold it's remaining 25% holding in the F1 team to Genii Capital, will continue it's involvement as engine supplier to the team.

The release also hinted that Genii might sell a shareholding to Group Lotus in the future, with the title sponsorship agreed through 2017.

Gerard Lopez, chairman of the Renault F1 team said, "We are delighted that we can now go public with the news that we will be racing as Lotus Renault GP in 2011. It is extremely exciting to begin a new era for the team in partnership with Group Lotus, and we will continue to enjoy a strong relationship with Renault over the coming seasons. It is a tribute to the excellent work this year by the team in Enstone that we have been able to attract both major sponsorship and new investment for a very bright future."

Group Lotus CEO Dany Bahar said, "I can think of no better platform for automotive brand communications than motorsport and F1 is the very pinnacle of open-wheel racing. We're well aware that there has been a lot of controversy around the usage of our brand in F1 and I'm delighted to be able to formally clarify our position once and for all: we are Lotus and we are back."

The team has released a proposed livery featuring a black and gold car reminiscent of the classic John Player Special Lotus's. We now have the possibility of four black and gold cars on the grid, which will just confuse the fans.

The move intensifies the situation between Proton and Team Lotus, which Tony Fernandes and his associates launched in 2010, using the Lotus Racing name under license from Proton. At the end of this season Tony Fernandes bought the rights to the Team Lotus name from David Hunt.

There is a court case in the UK regarding the right of Team Lotus to use the name they've entered the championship with, but since 1995 David Hunt has won all cases against him, so presumably the team is legally in a strong position. Many regard the move as another attempt by the Malaysian government, who owns Proton, to undermine Fernandes.

Team Lotus will now stick with its green and yellow colours for 2011 after chief Tony Fernandes said it would be 'ludicrous' for his squad to run in the same paint scheme as the rebranded Lotus Renault outfit.

In the wake of the announcement this week that Lotus Cars was buying a stake in the Renault team and becoming its title sponsor, there had been fears that confusion could be caused by both the Enstone outfit and Team Lotus racing with the same black and gold colours for next year.

However, although Fernandes remains steadfast that he will stick with the Team Lotus moniker, he thinks it better for his outfit to stick with the famous green and yellow brand that it used this season rather than see through his original plans to run in black and gold.

Speaking exclusively to AUTOSPORT for the first time since the Lotus/Renault announcement, Fernandes said: "I have no problem that there will be two Lotuses on the grid. But I do think it would be ludicrous if we are both black and gold, and I can inform you that we will be changing our plans for the colour scheme.

"We declared that we were going to run in black and gold, and I'm not going to be childish to say we were first with our plans, so we will do it whatever. They have painted their car black and gold, they have made their intentions clear on that front, so be it.

"But every cloud has a silver lining, and I received some messages from people suggesting that by being black and gold we would be promoting a cigarette company. I wasn't actually aware that JPS [John Player Special] was still being sold in the United Kingdom and various parts of the Commonwealth. So did I need that controversy? No.

"And after yesterday's announcement by the FIA about the new engine plans for 2013, which means F1 is going green - so what better colour to be than green? So, we have been testing our fans' reactions and many have come back to us to say we should stay green and yellow. So, I am 99 per cent sure that we will be green and yellow."

Fernandes has expressed some frustration that Lotus has decided to team up with Renault, rather than throw its weight behind Team Lotus.

Speaking about the Lotus Cars decision, Fernandes said: "My first reaction is obviously disappointment. We were originally given a mandate for five years to go and develop a Formula 1 team.

"There are comments that have emerged in the Malaysian press that Proton was disappointed with our performance, which is one of the reasons that they gave up. I don't know how anyone in their right mind could expect us to be competing in the top half of the grid, or even up in the bottom half of the grid, last year - having just been given an entry in September.

"I stand by the fact that I think we did very well in the year and I think that 99 per cent of the paddock would agree considering where we came from. We built a classy team - a team that could do pitstops in the same time as Ferrari. We looked good, we had a good motorhome and performed well on the track with two good drivers.

"We were the best of the new teams. We had two good drivers and Heikki Kovalainen said he had the greatest season he has had in F1 – which is great testament from a guy who has driven for McLaren and Renault. So I am a bit disappointed that we did not get a chance [from Proton/Group Lotus]."

He added: "Logically I think we could have built a great brand together. I think this year if anyone says that we didn't help Lotus then I think they are mad, because we have helped them. And the reaction from the public is very strongly in support of us. So I think given time we would have built something good, and the perfect scenario for me would have been a merger of the two with one ambition."

Fernandes has said that he will push on with legal moves to get a clarification on the Lotus name situation in the courts, and said he has been hugely encouraged by messages of support from fans.

"You cannot win people overnight," he said. "This support we have got has been built up over a year.

"As I always say, things take time and things have to be done properly. You cannot parachute yourself into a brand. If you look at all my business strategy I have always believed in organic growth. It needs foundations and it needs strategy. You cannot parachute into something and say it is yours.

"People are not stupid any more, and I think the reason for the support is the people see we are trying to do something the right way.

"I am not Colin Chapman, and I never will be. He is a legend and we are not going to emulate him – but everything he did is what we are doing. He built it from scratch and did not buy into anything. You have to have brands that people love. There is lots of competition out there and people have to have respect for what you do."

The Judge found that:

*Group Lotus has goodwill associated with the name "Lotus" in Formula 1 and is free to compete in the sport under that name using the Lotus roundel;

*Group Lotus is entitled to race in F1 using the historic black and gold livery;

*1MRT is in breach of the licence granted to them by Group Lotus to race in F1 under the name Lotus Racing and has awarded Group Lotus damages in respect of that breach.

*Team Lotus Ventures Limited's trade mark registrations in the name of Team Lotus are cancelled as a result of non-use.

*Group Lotus trade mark registrations are unaffected.

*Group Lotus has the right to use the Lotus marque on cars for road use.

*The Judge also found that Team Lotus has the right to continue to race in Formula 1 under the name Team Lotus but the effect of the Judgment is that only Group Lotus can use the name "Lotus" on its own in F1.

The Proton-owned company added: "Group Lotus is concerned that this aspect of the Judgment will cause confusion in the eyes of spectators and the wider public. Accordingly, Group Lotus is seeking leave to appeal so that the right to use the Lotus brand in Formula 1 is clarified once and for all in the interests of the sport and the fans. Group Lotus and its shareholder Proton Holding Bhd are confident of success on appeal.

Group Lotus head of legal, Sarah Price, said: "Group Lotus is pleased that its right to race under the Lotus name in F1 has been upheld and that the Defendants' attempts to stop that have failed.

"The on-going dispute with Team Lotus and associated companies has been a cause for concern for all at Group Lotus. Despite the detailed judgment there are issues which still require clarification and we remain committed to obtaining this much needed clarity for the many fans of the Lotus marque - we are extremely grateful for their continued support. The decision to appeal has not been taken lightly."

Lotus has terminated its title sponsorship deal with sportscar manufacturer Group Lotus, AUTOSPORT can reveal, but remains wholly committed to keeping the famous name in Formula 1 for the future.

On the back of financial uncertainties for Group Lotus, which was recently sold by Proton to Malaysian automotive conglomerate DRB-Hicom, Lotus F1's team owner Genii Capital has ended its formal relationship with the marque.

AUTOSPORT understands that Genii owner Gerard Lopez recently agreed a deal for the title sponsorship deal, which was originally put together in 2010, to be cancelled, as well as an old option that Proton had to buy 50% of the team annulled.

Speaking about the situation, Lopez told AUTOSPORT: "The sponsorship agreement and the obligations of Lotus have been terminated. There is no option from Group Lotus to buy into F1 now - that option was taken over by us. There was one, but we have taken it over now."

Although the end of the Group Lotus sponsorship tie-up means a change of plans for the team, Lopez says that he remains committed to the Lotus name.

"We are happy to carry the Lotus name as we believe it is a good name for F1," he explained. "We funded the team last year and the year before for whatever delta was missing. We would prefer to have sponsors up to the full amount – but if we have to fund it then we will fund it.

"When we changed the name from Lotus Renault to Lotus [for this year], it opened up the door for a title sponsor. So if you take into account the fact we signed Unilever, probably the biggest sponsorship agreement this year in F1, and we signed Microsoft, which is huge news as it is a brand that has never been in F1 before, we have a wide space for sponsorship.

"If we sign a title sponsor now, we will end up with a better cash flow situation than this team ever had before."

Lopez has previously been linked with a potential takeover of Group Lotus, having held talks with Proton before it was recently sold, but he says the situation for him at present is unclear in light of the DRB-Hicom deal.

When asked if he would be interested in buying Group Lotus, Lopez said: "We don't know yet, because we really do not know what the new owner wants to do with it."