Australian Grand Prix organisers have dismissed suggestions from Formula 1 supremo Bernie Ecclestone that tobacco advertising laws may imperil the future of the event.

The Australian GP will lose its exemption from a ban on tobacco advertising after this year’s race.

This prompted Ecclestone to claim on Tuesday that the organisers may find themselves in breach of contract and have to pay compensation.

“We’ve always relied on the fact that in Australia we can run with tobacco branding, but I understand now that there may be some problems with that,” Ecclestone told the Sydney Morning Herald.

“If there’s something in the contract that refers to tobacco advertising, obviously it’s something to be worried about.

“We’ve got a contract with Australia and we’ll have a look and see exactly what’s what.”

But Ron Walker, chairman of the Australian Grand Prix Corporation, has insisted that he has a water-tight contract with Ecclestone through to 2010.

“We have a long-term contract with Mr Ecclestone,” he told Australian national broadcaster ABC.

“We have a contract that clearly conforms with the law of Australia and once the law is changed, we cannot, under the law, display cigarette advertising.

“This has become very wide now, in fact, all over the world.

“The banning of tobacco advertising is gradually being phased in.

“The tobacco advertising Mr Ecclestone is referring to was negotiated by Mr [Max] Mosley, the FIA president, the world governing body of motorsports, directly with the Howard Government.”

Erhm, isn't there one particular team which for some obscure reason still is allowed to have tobacco advertising all over their cars and overalls ?

Although the home country of that team has a general ban on tobacco advertising in all sports ?