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It began, of all places, in a photocopy shop in southern England, near the headquarters of one of motor racing's best-known teams.

There, last June, Trudy Coughlan, wife of McLaren team chief designer Mike Coughlan, walked in and arranged for 780 pages of technical documents belonging to rival Ferrari to be digitized. An employee of the copy shop, suspicious that something wasn't on the up-and-up, contacted Ferrari.

The rest, as they say, is history — history-making, that is.

Yesterday, the World Motor Sport Council, the governing body of Formula One auto racing, slapped the unprecedented fine of $100-million (U.S.) on McLaren, the latest chapter in a high-test case of industrial espionage that has rocked the auto-racing world.

"Wow, that's a huge amount of money," former Formula One driver, team boss and a four-time Champ Car champion Bobby Rahal said yesterday.

"It's pretty severe. It's a huge embarrassment for Mercedes and [McLaren team chief] Ron Dennis." McLaren's owners include DaimlerChrysler AG's Mercedes-Benz.

The decision is the result of a hearing yesterday in Paris, where the motor sport council heard "new evidence" concerning the alleged use of information contained in secret Ferrari technical documents. Not only has McLaren been hit with a mammoth, record fine, but the team has also been stripped of its constructors' points for 2007, meaning it no longer is in the running for Formula One's overall team title.

McLaren's two top drivers, rookie Lewis Hamilton and two-time champion Fernando Alonso, lead the Formula One drivers' standings.

They will retain their individual points and will continue to vie for the drivers' championship, but for now McLaren and its reputation have taken a significant hit.

"The most important thing for a corporation is to try to convey an image of honesty and ingenuity," Mr. Rahal said.

"[But] I don't believe for a minute that this is the first time that this has happened."

With McLaren out of the picture, Ferrari will win the constructors' crown, while the F1 championship remains a fight between Mr. Alonso and Mr. Hamilton, who are separated by just three points with four races to go.

In addition to the fine, the WMSC asked McLaren for a full technical report on its car prior to its December, 2007, meeting and reserved the right to impose further sanctions in the 2008 season. The team escaped the severest punishment, which would have seen it banished from the rest of the 2007 championship and excluded from competing next year.

McLaren does not dispute that pages of technical automobile data improperly came into Mr. Coughlan's possession. The team maintains, however, that the information wasn't used to give their team an advantage.

"We have never denied that the information from Ferrari was in the personal possession of one of our employees at his home," Mr. Dennis said in a statement. "The issue is: Was this information used by McLaren? This is not the case and has not been proven [yesterday]."

The sordid tale began several months ago, when Ferrari fired its performance director, Nigel Stepney. Ferrari suspected that Mr. Stepney, disgruntled over a personnel shuffle at Ferrari, had leaked data to Mr. Coughlan, who knew Mr. Stepney and had worked with him at Lotus during the late 1980s. The team began court proceedings against him in Italy.

In late July, the Fédération Internationale de l'Automobile, the WMSC's parent body, held a hearing into the events. Even though it ruled that McLaren was indeed in possession of confidential information, it decided not to punish the team because it ruled there wasn't enough evidence proving that the documents were used to its advantage. Ferrari called the decision "incomprehensible."

The FIA announced last week that it was calling a new hearing of the council in the wake of new evidence. "Ferrari is satisfied that the truth has now emerged," the Italian team said in a statement yesterday.

McLaren can still appeal.

"We believe we have grounds for appeal," Mr. Dennis said. "But of course we are going to wait for the findings of the FIA, which are going to be published. The most important thing is that we go motor racing this weekend, the rest of the season and next season."

Mr. Rahal said that he finds the entire episode perplexing, stating that Formula One and other pro racing teams routinely poach one another's staff members in order to take advantage of their knowledge, and that teams go to extreme lengths to gain an advantage over their rivals. The simple reason is that the stakes, and the money, are so high.

"To me, all's fair in love and war, and racing is war."

Special to The Globe and Mail

With a report from Associated Press