Wales Rally GB, Britain's round of the World Rally Championship, is under threat.
The rally's long-time backer, the Welsh Assembly Government, has withdrawn funding for this year's event, which is due to be held in late October.
This is despite the Welsh Assembly announcing a five-year deal to back the event from 2007 to 2011.
As a result, International Motor Sports, which organises the rally, has begun legal proceedings against the Welsh Assembly for breach of contract.
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