"We need dramatically to cut costs and get innovation back into Formula One," said Mosley, speaking at the Motor Sport Business Forum in Monaco today.
"We must stabilize the system with a base engine which anyone can have and which is inexpensive, as well as a standard gearbox.
"That will stabilize Formula One until we can bring in new energy-efficient engines which undoubtedly will be the future.
"But I would hate anyone to think that we want Formula One to lose sight of one of its main objectives, which is to remain the pinnacle of motor racing technology. If properly managed the regulations will ensure that this continues to be the case."
The sport looks likely to accept the introduction of a cheap, standard engine today, with Mosley meeting with representatives of the Formula One Teams' Association.
Five teams, including Renault, are believed to be interested in singing up for the standard engine idea, which is aimed at reducing costs drastically.
Today's meeting comes less than a week after Honda announced its withdrawal from Formula One.
Mosley warned that, given the current financial crisis, more manufactures could follow the Japanese car maker.
"Honda pulled out because of falling car sales and there is no guarantee that these falling sales, which affect all manufacturers, will not drop further," he added.
"If they do then we have to prepare for other manufacturers to pull out not only from Formula One but other areas of motor sport as well.
"But what is wrong with Formula One today was wrong before any of the present economic problems cropped up. Essentially it's the rules, which have become ever more restrictive compressing the work of the engineers into an ever smaller area.
"As such, success in F1 today consists of optimizing every single part of the chassis to the ultimate degree and that is both extremely expensive and utterly pointless."
Mosley was also critical of those teams calling for a delay or a ban to the introduction of the KERS systems next year.
"We've finally found a serious engineering challenge for the teams in KERS," Mosley said. "Some manufacturers have risen to this challenge, one manufacturer has produced electric systems which will astonish people when they appear, another team is working on a completely new technology which will also astonish people.
"But some leading teams, such as Ferrari, have said that they don't like KERS because it is 'too complicated'. Could you imagine the great F1 engineers like (Lotus founder, Colin) Chapman or (Cosworth co-founder, Keith) Duckworth saying 'I can't do that because it is too complicated'?
"It is a symptom of a disease in F1 where incremental change becomes the whole object of the exercise and real serious innovation plays no part."
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