Lewis Hamilton’s team will discover on Thursday whether they will lose championship points over the affair.

Trackside’s Keith Collantine explains the twists and turns of the story so far.

What’s going on?

The F1 world was rocked by the revelation that McLaren employee Mike Coughlan was found to have a confidential, 780 page Ferrari document. Coughlan has been suspended from his job.

Ferrari believes he used the document to improve the McLaren cars, raced by Lewis Hamilton and Fernando Alonso. McLaren denies the charge.

F1’s  governing body, the FIA, launched an investigation. At a hearing on Thursday 26th July, it agreed that Coughlan had the document but stated there was no proof McLaren had used them, so the team went unpunished.

So McLaren and Hamilton are in the clear?

Not quite. After the hearing McLaren was warned that if it were found it had used Ferrari information illegally: “it will face the possibility of exclusion from not only the 2007 championship, but also the 2008 championship.”

Ferrari boss Jean Todt was furious with the decision and attacked the FIA, saying: “There is not even a sign of logic in this verdict”.

The Italian motor sports commission requested an appeal hearing, which is set for this Thursday.

What about the Ferrari employee who’s in trouble?

Nigel Stepney, a British employee who’s been with the team since 1992, was suspended in June, before the Coughlan story became public.

It’s since emerged that he tipped off Coughlan about a part of the floor of Ferrari’s car that he believed was illegal.

It’s also been claimed that it was Stepney that handed over the file to Coughlan.

So was Ferrari’s car illegal?

McLaren boss Ron Dennis claims that Ferrari’s car had an illegal floor at the Australian Grand Prix – which Ferrari’s Kimi Raikkonen won.

McLaren passed on the information to the FIA who altered the wording of the rules forcing Ferrari (and some other teams) to change the floor of their cars.

Dennis attacked Ferrari in a letter last week saying: “Were it not for Mr Stepney drawing this illegal device to the attention of McLaren, and McLaren drawing it to the attention of the FIA, there is every reason to suppose that Ferrari would have continued to race with an illegal car.”

Were Stepney and Coughlan working together?

McLaren claim that they were unaware that Coughlan and Stepney kept in touch after Stepney tipped them off about Ferrari’s floor.

They claim that no-one at McLaren was aware that Coughlan had a Ferrari document in his position.

What does this mean for the championship?

McLaren and Ferrari are locked in a tight battle for the F1 constructors’ championship. And all four of their drivers are fighting for the drivers’ title.

If the FIA does decide to dock points from or disqualify either of the teams, it could ruin what has been a thrilling championship battle this year.

What do you think of the F1 espionage scandal? Has F1’s reputation suffered? What about McLaren’s and Ferrari’s? Let us know.