In reaction to the outcry that threatened the United States Grand Prix, its promoters have agreed a deal that will essentially eliminate tax payer funding of the event.

The move, which will see the promoters pay a $4m contribution to the Major Events Trust Fund for each year of the Grand Prix' 10-year contract, essentially eliminates all local taxpayer support for the event.

Describing the new proposal, Mayor Lee Leffingwell told the Austin Chronicle: "This confirms what I've been saying all along, that the city would be contributing no upfront money, and that the city would not be at risk.

Originally, the promoters agreed to pay the money for the first year only with the city paying for the remaining nine years of the contract. The city's contribution would come from revenue generated by the previous year's race in the form of a tax on car rental, hotels, alcohol and food sales. It has been estimated that the tax could bring in around $4m over the course of the GP weekend but critics of the event (and its burden on taxpayers) were highly sceptical.

Under the new agreement, the city can use the tax revenue raised over the course of the GP weekend for whatever it chooses as opposed to channelling it back into the event. "The city taxpayer is not on the hook for any money," council member Bill Spelman told the Statesman.

Consequently, the city will only act as the sponsoring municipality, while the state will meet the $25m annual hosting fee to the Formula One Group with money earmarked by state comptroller Susan Combs.

The agreement has yet to be formally agreed and the Austin Chronicle points out that there are still a number of issues that need to be addressed, such as who will be responsible for specific (city) expenses related to the event, however Spelman and Leffingwell are confident such issues will be resolved by June 23.

"I'm for it," said Spelman, assuming that the deal is concluded in its current form, including the 10-year contribution from the promoters.