Damon Hill has revealed negotiations with Bernie Ecclestone over Silverstone's bid to host next season's British Grand Prix are moving along "inch by inch."

Formula One supremo Ecclestone today met with Neil England and Richard Phillips, chairman and CEO respectively of Silverstone Holdings who operate the track on behalf of the British Racing Drivers' Club, of which Hill is president.

The meeting took place in the paddock of the new £800million Yas Marina circuit which Ecclestone joked on Thursday reminded him of Silverstone.

The fact is Silverstone is the only viable option available to host the race after Donington Park's financial problems resulted in their 17-year contract being cancelled this week.

As Hill concedes, the clock is ticking on the talks as Silverstone need to start selling tickets for the July 11 event.

"It's moving along," said Hill.

"Things are progressing inch by inch, and hopefully we'll get to a point where there is no gap and we can join the two parties."

Although Ecclestone remarked this week there was no gap, that drew a laugh from Hill before he added: "He was always going to give an answer like that.

"We've got to sort this out, and Bernie's been very helpful. He is coming to the table and working with our team to find a solution.

"But he has to get the best price, and so do we. We absolutely want to get it on, there's no question of that.

"But we're a small player. As a venue operator, we operate with a pretty tiny margin and we have to be careful."

That was evident earlier this month when Silverstone announced a profit for 2008 of just £662,000 on a turnover of £38.2million.

The problem is understood to be a yearly escalator clause in the deal of 7% based on an initial payment of £12million which would result in Silverstone paying double that amount after 10 years.

"Everything moves. They're all chips in the negotiation," insisted Hill.

"I am not involved in the detail of the negotiation, but the BRDC have to sign off the parameters.

"They're put to us by the circuit operators, Silverstone Holdings, and they have limits on them which are set by simple economics.

"There is no backstop for us. We don't have a safety net. It has to be within those defined limits somehow.

"Both Bernie and ourselves have to be flexible and try and find a solution, and that's what is happening.

"Ideally, it needs to be done sooner rather than later. It makes sense to get it done as soon as possible.

"But you can't rush these things. It has to be right.

"Obviously, we would like to have started selling tickets after the last grand prix, but that's gone, so we're now in overtime."

Although Hill can appreciate Ecclestone is a businessman determined to get the best price, he also believes the 79-year-old should take into account the historical significance of the British Grand Prix and Silverstone.

The Northamptonshire track hosted the first F1 race in 1950, since when the British Grand Prix has been a permanent fixture.

Standing in the world's most expensive circuit, Hill added: "Bernie is adamant his product, globally, can fetch a fee well in excess of what he sees the UK contributing.

"My argument is the UK contributes in many other ways, and that in the absence of state-funding, there has to be some recognition of the efforts made by Silverstone and the BRDC to be partners in this business and in this sport, as they have been since 1950."

Hill maintains the Moto GP contract, that Silverstone managed to attract from Donington, is and will be unaffected should Formula One return.

"That deal is done. The circuit is being modified to provide the lay-out the Moto GP riders like," confirmed Hill.

"Silverstone is a motor sport venue, and the BRDC are committed to keeping it a motor sport venue for as long as they own it.

"We'll be looking to put on as many and as varied motor sport events as we can, but Formula One is the one we would love to have."