Malaysia will no longer be organising the Formula One (F1) race after the government agreed to terminate the organising contract starting next year.

Prime Minister Datuk Seri Najib Tun Razak said the contract had to be terminated following sharp decreasing returns to the country compared to the organising cost.

"The decision was made after taking into consideration the reports and views of Sepang International Circuit (SIC) on the financial impact of F1 race on all interested parties.

"The government had to foot very high organising cost every year while the returns from organising the championship were diminishing in terms of spectators, visitors and foreign tourist arrivals in the last few years," he said in a press statement today.

Najib who is also Finance Minister said initially the F1 race had helped to promote the country as a destination of world standard sporting event apart from promoting the country as a destination of choice by global tourists.

"In 1999, only 16 countries hosted the prestigious race including two Asian countries but today, it has risen to 21 countries with six Asian countries, resulting in a fall in returns to the organiser and host country," he said.

Najib said the discontinuation of the race would enable the government to raise funding for the development of talents, infrastructure, transfer of skills and knowledge of motor sports.

He said the government would be utilising the available funds for other races such as MotoGP and and Go-kart; build special circuits in Sungai Petani, Kedah; upgrade facilities in SIC and assist professional drivers to be become F1 drivers.

"The Sepang Circuit will continue to play an important role in the effort to promote Malaysia at international level.

"It will continue to host major motor sports events such as MotoGP and many other national, regional and international races to attract visitors to Malaysia," he said.

Meanwhile, the prime minister said Petronas would continue to sponsor team Mercedes AMG Petronas in F1 as the company's marketing strategy.

He said the government recognised the support provided by Formula One Management (FOM) during the hosting of F1 races in the country in the past 19 years.

"I also wish to express my appreciation to FOM for its understanding and agreement that the 2017 F1 in Sepang will be the last F1 race in the circuit," he said. -- Bernama