The 36-year-old Scot has made the decision after finishing 10th in the standings last year, his worst campaign since his maiden full BTCC season in 2018.
Butcher scored one race victory in 2023 with the Speedworks Motorsport-run Toyota Corolla squad to bring his total BTCC tally to 11 wins and has decided to return to his roots in sportscar racing this year by targeting the 24-hour races at the Nurburgring and Spa.
He returned to form at the end of last season by qualifying on the front row at the Brands Hatch Grand Prix Circuit finale, only for punctures to wreck his chances of a good result.
“I know that I can do better,” Butcher told Autosport.
“As much as the car was not a championship-winning car last year, if I was on my A-game I believe I could have finished top six in the championship.
“But sometimes, when your head is not in the right frame of mind, you tend to attract a lot of things like incidents and punctures.”
Speedworks switched for last season from the customer M-Sport-built TOCA engine to a bespoke Toyota powerplant produced by Neil Brown Engineering.
While that engine shares common architecture with the BMW used by multiple title-winning team West Surrey Racing, it is heavier than the TOCA unit and has to be mounted transversely in the Toyota rather than longitudinally in the BMW. The effect on weight distribution meant that Speedworks was playing catch-up on revising its set-ups through the early part of 2023, and Butcher went through a change of engineer.
“With anything, when you change something like the engine it’s more than just power,” continued Butcher.
“These cars are quite sensitive to weight distribution, so we had to figure out what to do with an engine that is heavier.
“I put so much into this, and it took the wind out of my sails. Autosport had been tipping me as a title contender and we weren’t as competitive as we’d hoped.
“But I want to come back – I regard the BTCC as unfinished business and, coming back in the right frame of mind, I believe I can fight for a championship.
“I don’t believe I’m any slower than I was in 2022.”
Of his GT plans, Butcher said: “I come from sportscars, so I’m in the middle of trying to open some doors into that arena.
“I’ve got a few things going on, on and off-track, that need my energy, so this is 100% the right decision for me at this time.
“I’ve got some really cool classic stuff as well, so hopefully I’ll be racing at the Goodwood Members Meeting and Revival, and the Spa 6 Hours.”
In paying tribute to Butcher, Speedworks boss Christian Dick described him as “a lynchpin of our efforts over the past three seasons and has delivered the lion’s share of our success during that period”.
Dick added: “He has been a superb team leader; even when we were struggling at the start of last year, he was always the first to rally the troops, and his well-honed development skills played a major role in the way we managed to turn things around over the second half of the campaign.
“Speedworks is very much a family team, and Rory remains part of that family. He is one of the sport’s true ‘nice guys’ and has deservedly built up a very large fan base, all of whom, I have no doubt, will similarly be sad to see him go.”
Butcher’s decision comes amid strong speculation that Speedworks will have an all-new BTCC line-up in 2024 as it expands from three cars to four.
Sources suggest that 2012 World Touring Car champion Rob Huff remains in the frame for one of the seats after testing the Corolla last autumn.
Speedworks head of racing Danny Buxton would not be drawn on the Huff talk.
“We’ve held talks with Rob, as I’m sure some of our competitors have done,” said Buxton.
“Until we’re in a position to confirm anything, there’s nothing to announce.”
