Ferrari to escape tobacco law - 31st July 15:20pm GMT

Ferrari is to defy the European Union ban on tobacco advertising in Formula One motor racing after identifying a potential legal loophole that will let it carry Marlboro's livery at its home Grand Prix in Monza.

The ban officially comes into force tomorrow but Ferrari insists that it is exempt during September's Monza Grand Prix in northern Italy because the event can be defined as a "national" rather than a "cross-border" competition.

"Our official line is that we will always abide by the law of the country where we are racing," said Luca Colajanni, Ferrari spokesman. "As far as Monza is concerned, I suggest you read the law passed by the Italian parliament."

The move appears certain to lead to an angry showdown with officials of the European Commission, which is adamant that if the Italian government allows Ferrari to advertise cigarettes it will be in breach of the EC Tobacco Advertising Directive, which prohibits "sponsorship of cross-border cultural and sporting events".

"After July 31 tobacco sponsorship of Grand Prix races should cease," said Philip Tod, the commission spokesman for consumer affairs. "We hope the Italian government will not allow any tobacco advertising at its race."

The tactic is just one of a number of ingenious ruses by Formula One and the tobacco industry to preserve the lucrative commercial relationship, which is worth an estimated $250 million (£142 million) a year.