Williams were suspended from the Formula One Teams Association on Wednesday for entering the 2010 championship and breaking what had been a united front in a standoff with the governing body.
The former champions are the only current team to have formally submitted an entry, with champions Ferrari [ Images ] and others threatening to leave the sport unless the 2010 rules are rewritten.
"Following Monday's confirmation that the team has submitted its formal entry...the Formula One Teams Association has today decided temporarily to suspend Williams F1 from membership of FOTA," the team said in a statement.
"FOTA's decision, although regrettable, is understandable," added team owner Frank Williams.
"However, as a racing team and a company whose only business is Formula One, with obligations to our partners and our employees, submitting our entry to next year's Championship was unquestionable.
"In addition, we are legally obliged under our contract with FOM (Formula One Management) and the FIA (International Automobile Federation) to participate in the World Championship until the end of 2012."
The FIA has set a May 29 deadline for all teams to sign up, saying potential new teams need as much time as possible to prepare.
The FIA wants to introduce an optional 40 million pound ($64.11 million) budget cap, with those accepting it given greater technical freedom than those remaining on unlimited budgets.
However, FIA president Max Mosley said at last weekend's Monaco Grand Prix [ Images ] that the budget cap could be delayed by a year. He also expects all teams to compete on equal terms ultimately.
FOTA, who have previously emphasised their unity, were meeting in a London [ Images ] hotel on Wednesday to discuss their position after talks with Mosley over the weekend failed to reach an agreement.