UPDATE 1-Motor Racing-Champ Car and Indy Car agree unification

By Simon Evans

MIAMI, Feb 22 (Reuters) - Twelve years after a bitter and damaging split, single-seater motor racing in the United States has reunited into one competition.

The owners of Champ Car and the Indy Racing League (IRL) reached agreement in principle to unify the two competitions for the 2008 season, the IRL said in a news release on Friday.

The unified body will keep the name Indy Racing League and the competition will still be known as the IndyCar Series -- reflecting the dominance of the IRL in the new structure.

Testing for the new season will begin on Wednesday at the Homestead track, south of Miami.

The two bodies, representing what is called in the U.S 'open wheel racing', similar to Formula One, have suffered from the division of the sport.

NASCAR stock car racing has emerged as the most popular format -- establishing a dominant position in terms of live attendance, television ratings and sponsorship.

Single-seater racing was unified under the governing body CART until Indianapolis Motor Speedway owner Tony George split in 1996 to form the IRL which had the rights to the high-profile Indianapolis 500 race.

CART declared bankruptcy in 2003 and although the series continued as Champ Car, last year it lost the two title sponsors Bridgestone and Ford and faced low participation and an uncertain future in 2008.