The International Automobile Federation said it had studied a range of measures including a global cost ceiling, the use of technical and sporting regulations to cut costs and increased standardisation of parts.
"The FIA, in agreement with FOM (the commercial rights holder), suggested the principle of setting a maximum price for engine and gearbox for client teams at the last Strategy Group meeting," it said in a statement.
"These measures were put to the vote and adopted with a large majority.
"However, Ferrari SpA decided to go against this and exercise the right of veto long recognised under agreements governing F1."
The FIA said it had decided not to make a legal challenge to Ferrari's veto, in the interests of the championship, but would now talk to all stakeholders about the possible introduction of a cheaper engine option from 2017.
It could then call for tenders for the contract.
Mercedes motorsport head Toto Wolff confirmed separately that Ferrari had used their veto.
"There was discussion about opening up the rules for next year as a main topic and whether there would be any appetite from us for a standard engine...and Ferrari decided to vote against the change in supply price," he said.
Formula One's commercial supremo Bernie Ecclestone said on Saturday that the plan was to offer a less complex engine as an alternative to the costly V6 turbo hybrid power units made by Mercedes, Ferrari, Renault and Honda.
Teams could then choose which to use.
"They (the cheaper engines) will probably have more power and use more fuel. It means I suppose that there would be regulation changes, which have already been anticipated for 2017 so there's nothing new," said Ecclestone.
The sport switched from V8s to V6 turbo hybrids last year. The alternative is likely to be a 2.2 litre V6 twin turbo similar to those used in the U.S. Indy Car series.
Ecclestone indicated Cosworth would be interested in returning with a less complicated option but others were also in the frame.
The 84-year-old said the introduction of a different engine would not turn the championship into a two-tier series and pointed out that decades ago the sport had both turbo engines and normally-aspirated ones.
(Reporting by Alan Baldwin, editing by Martyn Herman)
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