According to Crash.net KTM have parted company with KR basically they're cutting development because of rule changes in 2007 to 800cc and don't see it as good business practice to invest in something at that level which will be out of scope in a year.
KTM pay Shakey's wage and also pay for the tyres so quite a big chunk of money now not going into the team...
What now for Shakey then? he's not had much luck since winning BSB has he?
Suppose he's not doing too bad as he's dating Jodie Marsh though