The world motor racing federation (FIA) has postponed for a week a decision on whether to cancel the 1998 Belgian Grand Prix.

It has threatened to move the race to China or South Africa unless the Belgian authorities exempt motor racing from a new law which bans all tobacco advertising and sponsorship from sporting venues.

Lawyers for the race organisers have indicated they may take the case to an appeal court after failing to overturn the ban in court on Tuesday. Tobacco advertising is a major source of funds for the motor racing circuit.

Bernie Ecclestone has threatened to drop Belgium from next season's calendar

The law is due to come into effect on January 1, 1999, but the head of Formula One racing, Bernie Ecclestone, has previously said that Belgium will lose its place on the calender with immediate effect unless there is a prospect of the ban being overturned.

The director of the Belgium event, André Maes, said: "A national ban on Formula One tobacco advertising will do nothing for public health in Belgium, because people who are interested will continue to tune into foreign events where advertising is allowed."

The loss of the Belgian Grand Prix would be a severe blow to the local economy. Estimates put the income at $27m.

But the Walloon regional government, the owner of the circuit and local tourism federations who brought the case, still hold out some hope of staging the Grand Prix, scheduled for August 30 next year.

An EU agreement outlaws all tobacco involvement in sport after 2006

The organisers could take the case to Belgium's supreme court to challenge the ban on constitutional grounds, or to the European Court of Justice to determine whether it contravenes European Union law.

The FIA has already issued threats that the Grand Prix circus may move the bulk of its traditional races away from Europe if tobacco sponsorship bans are imposed.

A newly completed track in China, and the Kyalami circuit in South Africa are already the standby venues.

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