Former Red Bull boss Christian Horner's return to Formula 1 could be as the head of a 12th team entry with Chinese car manufacturer BYD, with talks on a potential tie-up ongoing.

In the wake of his surprise dismissal from Red Bull in the middle of last year, Horner has been evaluating his options to make an F1 comeback, with it clear he feels he has unfinished business in grand prix racing.

Early interest from Aston Martin did not get as far as a deal, while most recently he has been linked with a bid to purchase the 24% stake in Alpine that American investment group Otro Capital is looking to offload.

But while a decision on that is set to be made in the next few weeks - with Horner facing a notable rival bid from Mercedes - another possibility for him has now emerged.

That could be with Chinese car manufacturer BYD, which specialises in electric and hybrid vehicles, and has long been interested in a possible future entry into F1.

It has emerged that during a visit by Horner to the south of France last week, where he also attended the Formula E race in Monaco, he spent time with BYD during a special activation event it held at the Cannes Film Festival.

During that event, it is understood Horner met and spoke with Stella Li, BYD's executive vice president, to discuss thoughts on F1 and scope for a potential partnership. The pair of them also posed for photographs together.

While it is understood that discussions did not get as far as green lighting the F1 project, sources suggest that the negotiations were positive and that there is serious potential to move the plans forward.

The timing of these talks is interesting because Horner is now a free agent to return to work for an F1 team or project, following the expiration of a non-compete clause that was agreed as part of his Red Bull severance package.

BYD has made no secret that it is actively exploring its options in F1, with Li having revealed earlier this year that she discussed ideas with F1 CEO Stefano Domenicali at the Chinese Grand Prix.

Speaking to Italian publication SportMediaset in the wake of those talks, she said: "I like Formula 1 because it's about passion, culture and people dream of being in Formula 1…it's something we're discussing. It's a real opportunity to test our technology."

A tie-up with BYD, which clearly has the funding necessary to invest heavily in F1, would be a perfect solution for Horner, who is understood to have no interest in just returning to F1 as team principal.

He wants to either have a financial stake in a team or be in control of things to the same extent that he was at Red Bull, where he was CEO as well as team boss.

A BYD F1 team would offer Horner the chance to build a project from scratch and shape it in the best way possible, as opposed to buying into a current operation such as Alpine which has other major shareholders and where control would be much more difficult.

While BYD has been linked to Alpine in recent weeks, it would only use an existing F1 team as its way in if 100% ownership was on offer. It is understood that its preference is to set up a project from scratch as a 12^th entry.

Getting a start-up onto the grid is something that would take time, with the first hurdle being to get F1 to open up the entry process once again as it had to do for Cadillac.

But FIA president Mohammed Ben Sulayem has long been clear that he thinks grand prix racing would be boosted by the presence of a Chinese car manufacturer on the grid so would likely be supportive of doing what was necessary to open the door for BYD.

Speaking last year, Ben Sulayem said: "If there is a Chinese [manufacturer interested], and I will speak on behalf of FOM, they will agree to that, because it is about sustaining the business."

"If there is a team from China, let's say, and FOM approved it, and I am 100% they will approve it, wouldn't it make more money with China coming in? I believe, yes."