The player auction for the 2012 IPL will be held in late January or early February and the teams will have an additional salary cap of $2 million, ESPNcricinfo has learned. The players from the Kochi Tuskers Kerala franchise, which was terminated earlier this year, will be part of the auction.

According to a formal communication from the IPL Governing Council, which met earlier today in Chennai, the squad sizes for each team have been increased from 30 to 33, with eleven foreign players per squad, up one from the previous limit of 10. However, the number of foreign players that can be part of the final XI will remain at four.

The teams will play their games on a home-and-away basis, so each of the nine teams will play 16 games as opposed to 14 in 2011. The changes mean the IPL reverts back to its original format, where all the teams played each other twice, a format that the franchises have always preferred. There were no changes to the play-off format. The two finalists, Chennai and Bangalore, will host the play-offs in 2012.

The decision to include the Kochi players in the player auction effectively means the board has decided to stick with nine teams for the time being. The BCCI voted to terminate the Kochi franchise at its annual general meeting in September. At the time board president N Srinivasan said that the governing council would decide on whether to issue a tender for a 10th franchise.

Should any of the Kochi players fail to attract the bid, their salaries will be covered by the IPL through the franchise's bank guarantee worth Rs 156 crores that has been encashed by the BCCI. Among the leading players that will be part of the auction are Muttiah Muralitharan, Brendon McCullum, Mahela Jayawardene and Ravindra Jadeja.

An official of one of the franchises was satisfied with the format for the 2012 season but not with the decision to increase squad size. "After Kochi went, the home-and-away format is a logical step," the official told ESPNcricinfo. "But 33 players is too much. Even 30 were too many. What they are trying to do is to ensure that the Kochi players get hired. If they are not hired, then the IPL has to pay for them. So they are trying to push that cost to the franchises by saying, 'Some you hire and some we'll hire'. Otherwise it makes no sense to increase the foreign players' count to 11. Even ten was too many as you are only playing four."

The governing council also decided that the first window for trading players will be between December 15 and January 20, with a shorter window after the auction. There is no financial cap on trading, though each franchise can add only a maximum of four players to their squad through trading.

In other IPL news, Chris Gayle is likely to stay with Royal Challengers Bangalore as a rule that allows the team which hired the replacement player to have the first right over him has been retained. Gayle transformed Royal Challengers' fortunes after being brought in following Australia fast bowler Dirk Nannes' injury early in the 2011 season, steering the team to the finals.

Also, in a jolt to the IPL, MAXX Mobile, the sponsors for the strategic timeout, have decided to terminate their three-year contract which was signed in 2010. The governing council deliberated on possible action against the company in case it does not compensate the IPL for exiting the contract ahead of the expiry date.

Additional reporting by Nagraj Gollapudi

Tariq Engineer is a senior sub-editor at Cricinfo