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The Royal Bank of Scotland (RBS) has announced it plans to end its sponsorship of the Williams Formula One team at the end of its current deal in 2010.

The bank confirmed the decision was as a direct result of the current economic downturn.

RBS has been one of Williams' main sponsors since 2005 and the decision to pull out of the sport could severely hurt one of the few non-factory teams who remain in the sport.

The end of the Williams deal is part of a decision by RBS to reduce its sponsorship of sporting events by up to 50 per cent by 2010.

Despite the news team principal Sir Frank Williams is confident his team will be able to fund their place on the F1 grid.

He said: "Thanks to the support of RBS and our many other loyal partners, we are in a strong position to ride out the inevitable challenges of the next two years."

RBS also announced that it plans to significantly decrease trackside sponsorship during next season and will have none at all in 2010, while the bank will also reduce hospitality costs by 90 per cent.

Andrew McLaughlin, RBS group director of communications, said that the savings had to be made because of the losses incurred by the bank in recent months.

He said: "We recognise that we are now operating in a very different economic environment and have been reviewing all of our activities since October.

"It is imperative that we respond to the reality of the situation we face and that we do so in an orderly way that respects the commercial agreements we have in place and the implications for our partners and the jobs they support."

Williams have said they are confident they will be able to find a sponsor to replace RBS when their contract ends in 2010.