Branson refused to confirm he was in talks with Honda
Sir Richard Branson admits he would be interested in becoming involved in Formula One, but only if it met certain financial and environmental conditions.
The Virgin boss has hinted he could back an F1 team, but refused to confirm a direct link with Honda.
"They need to get the rules changed to make F1 economically viable in these tough times," he told BBC 5 Live.
"F1 should be also championing cleaner technology. If we were to get involved we'd want our cars run on clean fuels."
Honda stunned the sport in January by announcing their immediate withdrawal from the world championship because of the effects of the global economic crisis.
It had been hoped a new owner would soon be found to allow Honda, in whatever new guise, to be on the grid for the season-opening race in Australia in five weeks' time.
The deadline for an agreement to buy the team is believed to be next week, one month before the 2009 season's first race in Melbourne.
A management buyout, led by current chief executive Nick Fry and team boss Ross Brawn, has been mooted for some time.
But this week it emerged Branson's Virgin Group could be a potential backer.
However, while admitting it would be "fun" to become involved in the sport, Branson was coy on any direct takeover of the cash-strapped British-based outfit.
"If we were (going to take over Honda) there would be a clause that would prevent me talking about it," Branson added.
"Having said that, I love Formula One, I think it could be even more exciting and I think the management of the sport agree on that.
"But I think they need to organise F1 so the teams can actually make money rather than lose it, particularly the smaller teams. Again, I think Bernie Ecclestone recognises that.
"Any sensible investor in F1 would want to have a very good discussion with Bernie to make sure that the rules of engagement make the sport less cash-hungry going forward.
"You can still have an incredibly exciting sport that doesn't cost each team hundreds of millions every year just to get the car on the road."
Branson insists environmental issues are just as important to him as any financial concerns and called for the sport to clean up its act.
"Running on clean fuels would set an example to normal cars on the road," he said.
"I think there are faults there which would need to be rectified before we moved into F1.
"It's not very green at the moment. Those two provisos would be essential before Virgin entered the sport."
Branson also hinted that any team takeover would take on the Virgin name.
He added: "I'm sure that if one day we went into F1, the Virgin brand is dear to my heart so it would be quite likely that any team would be a Virgin car going around the circuit."