According to a report in the German newspaper Bild, Ferrari has offered seven-time World Champion, a new two-year contract.

According to the report, the Maranello outfit has offered the German £24m ($43m), a year for two years, in addition to an opt-out clause which would him allow to 'retire' should he win another title.

"The best part of it is that it doesn't tie Schumacher unconditionally for two more years," said the report. "He could, if he wanted to, get out of it without any problem sooner.

"He could opt out after the 2007 season, or even after the current season, because the new contract has a 'world champion clause'. If he had the title in his pocket he could quit the next day, if he wanted to."

Ferrari refuses to comment on this and other speculation, and is instead waiting on Michael to make up his own mind as to whether he continues racing or not. It's widely understood that the German will announce his decision in June or July.

Meanwhile, Schumacher's spokeswoman Sabine Kehm has dismissed the report as "pure speculation".