Michael Schumacher has had his second place removed from the 1997 final standings, in a decision handed down by the FIA this morning. Schumacher was on trial for his controversial accident with Jacques Villeneuve in the European GP at Jerez.

Schumacher had scored 78 points this season, but now finds himself not in the final listing despite winning 5 races. The results off all this year's races will not be altered. Ferrari will keep their points.

Max Mosley had indicated that the FIA had considered applying a fine additionally, but had decided against it.

Some people have already stated that this punishment is nothing more than a slap on the wrist. But Mosley commented: "It is much more than a slap on the wrist. If he was banned from next year then it would not affect what he had done this year. That would be no deterrent. We needed to do something that showed an example to everyone in the sport at all levels."

Schumacher said after the hearing: "It's something I have to accept, for what I did on the circuit in Jerez, and for me it is tough to lose second place in the championship. The last couple of weeks have been tough for me because I lost the championship, which I was confident I would win, and I found that very difficult to accept. It was not easy for me to live with that. For two or three days, I also struggled at night with my sleeping because of the pressure I felt from what I had done. I am a human being and it happens to me the same as it happens to everybody else. I have to learn from this incident now. "

"It was an instinctive action and it important that they decided it was not deliberate. If it was, I would have done things differently to what I did because I could have let him go and caught him and passed him back on the inside," the German added.

Mosley commented: "It was an instinctive reaction. If we thought it was premeditated then we would have had to take a very serious view. It is still a very serious matter and it is a major penalty we have imposed. In this particular instance, both Villeneuve and Schumacher were under enormous pressure. They had one point between them, they had people shouting in their ear 'he is just one second behind you' and the pressure, in those circumstances, is enormous.

"Schumacher did the wrong thing, obviously, but all the evidence points to him reacting instinctively. Had he thought about it, for one second, he would have allowed Villeneuve through. Schumacher is a human being and every now and then he will make a mistake. He admitted he did it deliberately, but instinctively, and it was the wrong thing to do."

Williams and McLaren were also at the hearing to explain the claims made by the London Times that the result of the last race was fixed. Ferrari had tapes of conversations between Villeneuve and the Williams pits which seems to indicate he had let the McLaren's past but both teams have denied the existence of an agreement. The FIA had the same oppinion after hearing both teams.

Mosley said: "The world council is quite satisfied that there was no arrangement between Williams and McLaren to fix the outcome."

Now that Michael Schumacher is allowed to compete next season, he is also the title favourite. Or at least the bookmakers feel this way. Bookmakers William Hill put Schumacher down at 6-4. Villeneuve is at 7-4, Hakkinen at 8-1, Frentzen at 10-1 and Coulthard 12-1.

A spokesman said: "We were anticipating Michael Schumacher receiving at least some meaningful punishment. In which case, Villeneuve would probably have been our favourite. But he has got off virtually scot-free and on ability, expected improvement and reliability of his car, he is entitled to head the betting list."