Virgin Group, the parent company of various business interests owned by Sir Richard Branson around the world, has signed what is believed to be an initial two-race deal with Ross Brawn’s new Brawn GP Formula One team at the rate of US$250,000 a race until a more permanent deal can be finalised.

The deal was signed by the team's commercial supremo David Butler on the eve of the Australian Grand Prix, won by Brawn GP's Jenson Button. Branson cut short a skiing holiday to fly to Melbourne on one of his own planes to witness the team's first race. A pdf for the Virgin logo was sent by email from London and vinyl stickers cut in Melbourne to be mounted on the car. There was no time to modify the team’s uniforms.

The deal, which saw three Virgin stickers on what turned out to be the race-winning cars, is likely to be extended in a fresh agreement in two weeks. The agreement may see Virgin Group take a substantial shareholding in the team and also become its title sponsor. It is unlikely, however, to see the team’s car rebranded as a Virgin for the 2009 season although that may be possible for 2010 onwards.

Whatever deal is eventually signed, it will be for a small amount of money thought to be less than US$10 million. The team was earlier thought to be offering the title sponsorship free to any company that committed to sponsor it in 2010; its 2009 budget of US$146.5 million is already fully funded. Earlier Qatar Airways turned down the chance to sponsor the team for free in 2009.

Branson admitted when he arrived in Melbourne it had been an opportunistic deal fuelled by the fact that the team was desperate and no one else had come forward. He was persuaded by the performance in testing of the car. After that Branson sniffed the chance of a favourable deal as he said: "We've thrown something together in a very quick period of time. We signed it four hours before I got on the plane. We would have come here with a slightly more complete deal, I suspect, if we'd had a bit more time. We've come here with the first stage part of the deal, which is meant in two stages, and we will see what happens over the next two or three weeks."

Branson turned down a chance to get involved in buying the team from Honda when his company was the only serious buyer earlier this year. Branson said: "We chose not to get involved at that stage."

The entrepreneur virtually admitted the deal was cheap when he told Autosport journalist Jonathan Noble: “I've been quite fortunate in that I have done quite a lot of sporting activities, and it hasn't cost any money as I always got someone else to sponsor it. So I am a bit of a cheapskate when it comes to these things, and make everything pay its way. So the idea of writing tens of millions of pounds or dollars for sponsorship is just something that Virgin has not done in the past, or needed to do. You have Virgin planes in every airport, and Virgin trains, we have other ways of getting our name out.”

But Branson could not resist the exceptionally good value offered by Brawn: "Sponsorship at the right value does make sense, and we have come in with an underdog team that needed financial help, at a time where they have had an engineer who has a fantastic track record and where they have a shot of doing well."

Now Butler and Branson's marketing team will work to thrash out a deal, although Branson admits his cheapskate approach means anyone could come in and gazzump him. In that instance he says he will walk away: "We are hoping that we will have a proper marriage quite soon – but we are a Virgin bride. They may find that someone comes in and offers them something even better before this bride marries up with them. But all of us would like to see, in a very short period of time, it developing into a more complete relationship – even in the next three or four weeks. But we will see. This is just a first step of hopefully a bigger relationship. We will see what will happen."

Branson has admitted he will push hard for the team to be reamed Virgin and says he does not like the Brawn name: “The team do not want to waste the name of the team on something that is not promoting anything, and everybody knows it has a great engineer, so the team doesn't need to be called after an engineer. That may well change.”

But Branson is unlikely to get his way - or, at least, not immediately. Ross Brawn had to apply specially to the FIA World Motorsport Council to get it to agree to allow a name change from Honda to Brawn on the eve of the 2009 season. The World Council was reportedly reluctant to agree the change. However they were eventually persuaded after personal pleas from Brawn. An official observer at the world council, FIA saloon car supremo, Jonathan Ashman, said: "At first the World Council was very very reluctant to allow the change and members asked what Brawn stood for." Ashman added: "They would have preferred the team to keep the Honda name but in the end recognised this was not practical." Ashman would not comment on whether a further name change would be allowed mid-season. Another insider, however, stated that he believed that it would be impossible to ask for two name changes in one season.

Meanwhile Branson is confident he will be the only bidder. Virgin has turned down countless bids to lure it as a F1 sponsor by virtually every team on the grid. Insiders say it has received more than a dozen serious pitches from Formula One teams over the past 10 years. Branson admits: "We would not pay the kind of monies that were paid in the past to sponsor Formula One." But Branson has been tempted by the opportunity to promote its Gevo brand of fuel. Gevo is an environmentally clean fuel that Branson hopes will be the petrol of the future both for cars and aeroplanes. He says: "One of the tasks that Gevo have had is to see if they can come up with a fuel for F1, maybe called the Virgin Fuel, that is clean, that doesn't emit any carbon and can perform as well as the dirty fuels that are used in cars to date."

A fresh deal announcement can be expected before the start of the European season in mid-May in Spain. In the meantime Virgin will likely carry on the existing deal at US$250,000 a race.