Lewis Hamilton may face reduced pay offer in new contract with Mercedes

London: British Formula One racing driver Lewis Hamilton will reportedly be facing a substantially reduced pay offer from his team Mercedes when they resume contract talks at the end of the season.

The news is reportedly likely to attract the attention of Ferrari and McLaren, who are potential rivals for Hamilton's services, whose three-year 60 million pounds contract with the German manufacturers expires at the end of the 2015 campaign.

The relations between Mercedes and Hamilton have come under strain after a series of incidents involving the Briton and his colleague Nico Rosberg , culminating in a collision in Belgium two weeks ago. The team's motorsport director Toto Wolff had warned both drivers that they could be split up if there was any repeat, The Guardian reported.

Hamilton is happy with his decision to join Mercedes, but the German team, despite being happy with the Briton's fast and committed services, also feel that they were bargained into a corner by the driver's agents, XIX Entertainment, when the original three-year deal was signed at the end of the 2012 season, the report said.

A Mercedes spokesman has only said that they don't discuss contractual details. But at the team's Stuttgart headquarters there are reportedly concerned voices that say Hamilton's deal is too high.

The notion of a pay cut is likely to be resisted by Hamilton and his agents, especially if he wins his second world championship this year. But if he does not, and he is 29 points behind with seven races to go, he will be pressed to sign a less valuable deal for 2016 and beyond.

Wolff said on Friday that this is an ongoing discussion between them and they very much want Hamilton to stay in the team and to enter into a new contract with him, adding that the Briton wants the same.

Wolff added that Mercedes has agreed that because the situation is so intense at the moment, they want to get over the season and then intensify the discussions about a contract renewal.

Wolff said that it is good and intelligent to put it on hold to fully concentrate on the world championship.