Ross Brawn advised on Wednesday newly crowned Formula One world champion Jenson Button to stick with his Brawn team instead of jumping to McLaren next season.
Mercedes on Monday bought out Formula One world champions Brawn GP, prompting uncertainty about the future of its drivers, and intense speculation that the 29-year-old Briton would leave for McLaren.
But team principal Brawn said negotiations were ongoing with Button, and he hoped that "logic" would ultimately prevail.
"Negotiations (with Button) are continuing and the reports that he has already agreed terms with McLaren are not helpful. I would be amazed if that were the case," Brawn told the London-based Independent newspaper.
"His best future is with our team, where he has a good group around him, and there's a lot to be said for that.
"The logical thing would be for him to stay with us, but of course logic doesn't always prevail."
German car giant Mercedes, which has taken a 75 percent stake in Ross Brawn's team, will be rebranded Mercedes GP.
Brawn, who took over the British-based outfit after former owners Honda quit the sport at the end of 2008, will remain in his role.
Reports have said that the new outfit was expected to plump for Nico Rosberg as their number one driver - a move that would be popular in Germany - with his countryman Nick Heidfeld his likely partner.