Sauber and McLaren engine partner Honda have announced the engine partnership for 2018, revealed back in May, has been cancelled due to disagreements over future direction.

It was reported the decision to tie-up with Honda, who have struggled since returning to Formula 1 in 2015, was one of the areas of contention between Sauber owners Longbow Finance and former team boss Monisha Kaltenborn, which led to her departure prior to the Azerbaijan Grand Prix.

Confirming the cancellation on Thursday in Hungary, Kaltenborn's recently installed replacement, former Renault boss Fred Vasseur, suggested Honda's problems did play a role.

“It is very unfortunate that we have to discontinue the planned collaboration with Honda at this stage,” the Frenchman said. “However, this decision has been made for strategic reasons and with the best intent for the future of the Sauber F1 Team in mind.

“We would like to thank Honda for their collaboration, and wish them all the best for their future in F1.”

General Manager for Honda's motorsport division, Masashi Yamamoto admitted it was a blow for the company to lose the deal, particularly as McLaren have also been weighing up their options for 2018, albeit with a continuation of their current partnership now appearing the most likely outcome.

“We had built a good relationship with Sauber, and had been looking forward to entering the 2018 F1 season together,” he said.

“However, during discussions after management changes at the team, we reached a mutual agreement to call-off the project due to differences in the future directions of both parties.

"We would like to thank Sauber for their cooperation, and wish them all the best for their future."

Sauber has been using 2016-spec Ferrari engines this season, something that has severely hurt competitiveness in recent races. Though no indication on whether a continuation of their long relationship with the Italian team was likely, the Swiss team did claim an announcement on 2018 engines would be made shortly.