F1 supremo Bernie Ecclestone says that Honda wants to supply Red Bull in 2016, but McLaren boss Ron Dennis is blocking the deal from happening.
Ecclestone added that he and the FIA agreed with Honda that they would expand to two teams in their second year.
However, McLaren has a veto on the identity of who that team might be.
"The honest answer at the moment it would appear that Honda are happy to give them an engine and Mr Dennis thinks they shouldn't," said Ecclestone.
"Although Honda have got an agreement with the FIA and myself that they would allow them into F1 to supply to engines to one team for first year, two teams second and three teams the third.
"And they somehow got involved and made a commitment to Ron that he had a veto on any engines, and he doesn't want Red Bull.
"He doesn't want them. I think he believes they may be competitors."
Asked how McLaren could have a veto given the Honda/FIA agreement, he said: "In fairness to Ron, he probably didn't know. I am not blaming anybody. They are the facts.
"At the time when they came in the FIA said if we let you into F1 you have to supply three teams, they said as we are brand new into F1 we don't think we can do that.
"We supply one team for the first year and after that, second and third year."
Ecclestone was non-committal on whether or not the deal would go through.
"I don't know… Ron has said definitely not. As far as he is concerned, so I don't know if his veto will stand up.
"They can only run Honda if Honda agreed and they won't agree obviously and have an argument with Ron, because Ron will sue them."
Asked if Honda would really represent competitive engine that Red Bull owner Dietrich Mateschitz wants, he said: "At the moment... But you don't know what next year's Honda is going to be."