Organisers of the Belgian Grand Prix say the event will go ahead as scheduled at the end of August.

The race had been under threat after a Belgian appeal court upheld a law that will introduce a strict ban on all forms of tobacco advertising and sponsorship from next year.

The race at the Spa Francorchamps circuit is one of the most famous in Europe.

But last year, the Belgian parliament passed a law banning tobacco advertising and sponsorship from January 1st 1999, and the race appeared to be doomed when an appeal to a local court proved inconclusive.

Formula One's governing body, the FIA, wanted to safeguard four yearly contracts and gave the organisers until last Sunday to settle the dispute.

According to the FIA there is now a draft of a new decree going before the Walloon regional government, the race's main backers, which will remove the threat to the sponsorship contracts.

The new law on tobacco advertising took Belgium out of line with its European Union partners.

EU legislation allows tobacco money to be phased out over eight years. The decision to go ahead with the race will be a relief to the regional government, and a host of local businesses who derive a great deal of income from staging the Grand Prix.

But there will be disappointment in South Africa and China who were both on standby in case the Belgian race was cancelled.

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