From a press release issued by KTM:

KTM 2005 in the 250cc Moto GP class!

The secret is out! Now it is official! Mr. Pierer (managing director of the KTM Sportmotorcycle AG) confirmed yesterday at the Grand Prix in Brno (CZ) officially, that KTM is preparing at full throttle to enter the 250cc Road Racing World Championship. Please remember the word “enter”.

It is very clear that we have a lot of work in front of us to prepare a competitive bike within the next 6 months. The first year will be for testing and to collect experience. Nobody can build a winning bike behind closed doors, so we will follow our successful philosophy of developing bikes under hardest conditions. This can only be in the Road Race World Championship.
At the moment it looks like Casey Stoner is committed to developing this project along with KTM.

Concerning the 125cc class Mr. Pierer defined our clear target for the coming season.
Following the entry season in 2003 and our success this year, we want to fight for the World Championship crown in 2005. At the moment we have not defined the riders that will take to the 125cc start line.