For the past seven months one of F1's biggest scandals has been brewing behind the scenes following the arrest in January of the sport's former chairman Gerhard Gribkowsky.

He represented German bank BayernLB which in 2005 sold a 47.2% stake in F1's parent company SLEC to current owner, private equity firm CVC. Gribkowsky was thrown into prison after German authorities discovered that his company in Austria had received £27m from businesses in Mauritius and the British Virgin Islands. Both are tax havens so it was hard to trace the money. Prosecutors claimed that Gribkowsky was paid for undervaluing BayernLB's SLEC stake and this led to rampant rumours about who paid the money. For the first time we now have a direct admission from the payer and it comes courtesy of an article in today's Telegraph by Pitpass' business editor Christian Sylt.

Gribkowsky was charged on Tuesday with breach of trust, tax evasion and having been in receipt of corrupt payments. Since then, F1 reporters from all the top UK papers have tried to get comments on this subject from F1's boss Bernie Ecclestone. The response was always the same - as the Financial Times reports today, Ecclestone said "he was unable to discuss details of the case." It is a different story with Sylt.

Ecclestone has known Sylt for around a decade and there is good reason why they are still in regular contact. Sylt and his colleague Caroline Reid are the only journalists worldwide who regularly cover the business of F1 for national media so they have in-depth knowledge of all the key financial issues in the sport. The Gribkowsky case is one of the most high profile at the moment and Sylt has been investigating it since its origins in 2005. Ecclestone didn't just open up to Sylt, he revealed his precise involvement.

On Tuesday the prosecutors claimed that Gribkowsky received £27m from someone they named as "Bernard E" and a company owned by Ecclestone's offshore Bambino family trust. Ecclestone doesn't deny it; instead he revealed to Sylt that he did indeed pay Gribkowsky. As Pitpass suggested back in April, Ecclestone says he paid Gribkowsky after the German made false allegations about his relationship with Bambino and threatened to report them to the UK tax authorities. Gribkowsky "threatened that he was going to say that I was running the trust," says Ecclestone. Flying in the face of all the theories, if this is proved to be true it would make Ecclestone a victim.

Before we get to the nitty gritty of Ecclestone's explanation of why he paid the money, it is worth considering the claims which the prosecutors' case is based on. On Tuesday they released a statement which described the £27m payment to Gribkowsky as "bribery money, whose payment was disguised through two fake consulting contracts with [companies] in Mauritius and the British Virgin Islands."

In short, it is understood that the prosecutors are still claiming that Ecclestone paid the £27m to Gribkowsky as a bribe for allegedly undervaluing BayernLB's SLEC stake. As Pitpass has pointed out in detail, it is incredibly hard to imagine that the SLEC stake was undervalued. Without going in to all the reasons again, we can recap by saying that CVC paid more than the book value BayernLB attributed to its stake, CVC offered to pay more than other bidders, CVC paid BayernLB more than it paid the other two banks which were SLEC shareholders and, finally, the consultancy firm Deloitte has reportedly concluded that the BayernLB stake was not undervalued.

Whilst Pitpass is not in a position to pass judgement, it does seem unlikely that the shares were undervalued and therefore unlikely that Ecclestone paid Gribkowsky to undervalue them. Ecclestone says he paid the money to Gribkowsky due to the threat he made. We do not know of evidence which contradicts this and, more to the point, it is hard to imagine why Ecclestone would fabricate such a story.

The prosecutors' claims don't stop there. They add that to compensate for what they claim was a bribe paid to Gribkowsky, the German agreed to pay £25.4m to Ecclestone on behalf of BayernLB, as well as £15.3m to Bambino. "These payments would not have been asked for were it not for the bribes to be paid to the accused," said prosecutors adding that BayernLB "incurred damages of almost £40.8m through the conduct of the accused."

Ecclestone disputes this and says "I never bribed anybody or paid any money to anybody in connection with the company." He explains that the payment by BayernLB to him was not to compensate for the £27m which was transferred to Gribkowsky but was in fact commission he received for arranging the sale to CVC.

"I got 5% for the sale of the company. Bayerische Landesbank approved the sale and approved the commission, which was cheap. I should have got more because for that sort of deal a bank would have charged a lot more. But they approved that, the bank approved that. There were no secrets."

Ecclestone adds that not only did he facilitate the sale to CVC but he also gave BayernLB "an indemnity for an awful lot of money that all the accounts were in good order because the bank would not give them." At the time of the sale to CVC F1 was in a state of disarray with teams threatening to leave the sport but Ecclestone says he vouched for its health and this is also why he got the payment from BayernLB.