[Iceman]

THE City of Melbourne signed a lucrative sponsorship deal with the Australian Grand Prix just days before Lord Mayor Robert Doyle called for the event to be scrapped.

The ink had barely dried on the contract, formalised on January 17, when Mr Doyle criticised the cost of the event to taxpayers, saying it no longer offered value for money and had outlived its welcome.

Concerns about the cost saw the State Government yesterday refuse to guarantee the future of Melbourne's Formula One event after the current contract expired in 2015.

Premier Ted Baillieu admitted the GP might have to go, unless costs could be cut substantially.

If the event were to have a long-term future at Albert Park, Mr Baillieu said the $50 million bill picked up by taxpayers for last year's event -- more than double the losses incurred in 2006 -- would have to be reduced.

Start of sidebar. Skip to end of sidebar.
Related Coverage

* Hot Topic: Is the GP out of gas? Herald Sun, 42 minutes ago
* Time we left grand prix behind Herald Sun, 42 minutes ago
* End flagged for Grand Prix Courier Mail, 6 hours ago
* Final lap for Melbourne's Grand Prix? Herald Sun, 1 day ago
* Time to kiss the GP goodbye Herald Sun, 1 day ago

End of sidebar. Return to start of sidebar.

Over the past three years, the event has run up losses of about $130 million with attendances hitting a low of 287,000 spectators in 2009.

Mr Baillieu said that the GP had been great for Melbourne and Victoria.

"But we look forward to the Grand Prix performing financially better and we will be looking to make sure that happens," he said.

Stunned GP insiders were yesterday struggling to understand the criticism.

"It's a strange move for the mayor to come out against the event when the contract has only just been signed," one source said. Australian Grand Prix Corporation sales and commercial manager Jeremy Kann confirmed that a deal had been struck.

Cr Doyle did not respond to calls yesterday. But in an article for the Sunday Herald Sun he said "time's up" for the GP.