Mercedes have declared that their drivers remain free to race for the World title but warned that further altercations could see team orders imposed as a "last resort."
Last Sunday in Austria, Lewis Hamilton and Nico Rosberg clashed on the final lap of the grand prix.
Hamilton recovered from running wide to win the race while Rosberg could only manage fourth as he nursed a damaged W07 across the line.
Mercedes threatened to implement team orders but after talking with the drivers on Thursday at Silverstone have decided against it.
Instead, Hamilton and Rosberg are under strict instructions to adhere to the new Rules of Engagement with a warning that any incidents will result in punishment.
"Our drivers were informed that they remain free to race for the World Championship," the team confirmed.
"We believe this is the essence of Formula One, including between team-mates. As passionate racers, we want to see them racing, and so do the fans of Formula One.
"However, this freedom comes with a duty for our drivers to respect the values of the team."
"We have strengthened our rules of engagement to include much greater deterrents to contact between our cars.
"With these in place, we will trust our drivers to manage the situation between them on track. Their destiny is in their own hands."
The statement added that the drivers had been "reminded that we may issue instructions during the race to protect against a potential loss of Constructors' points, such as we did at this year's Monaco GP when Nico was instructed to let Lewis pass.
"If the drivers do not honour the revised Rules of Engagement, we may impose team orders as a solution of last resort."
Enjoy the full experience of the 2016 FIA Formula One season on FOX Sports Play, where you can catch LIVE races from angles unseen before, exclusive interviews, behind the scenes, in-depth analysis and so much more. Don’t miss it!