Jan.18 (GMM) McLaren on Friday announced that Lewis Hamilton will stay at the Mercedes-powered team until at least the end of 2012.

The new five year contract follows reports earlier this month that said the 23-year-old Briton had inked a deal that will see him earn an average of more than $27m per season.

Hamilton reportedly made just $700,000 plus points bonuses while he raced to second place in the drivers' championship in 2007, the British tabloid News of the World claimed earlier in January.

"Given Lewis's performances over the course of the 2007 season, it is clear that improved financial terms were fully deserved and this formed part of the friendly negotiations with Lewis's manager Anthony Hamilton," McLaren chairman Ron Dennis said on Friday.

Hamilton signed his first McLaren contract as a thirteen year old in 1998.