Mercedes launch investigation into technical glitch that cost Lewis Hamilton victory in Australia

The defending champion was cruising to the chequered flag in Melbourne but was leapfrogged by Sebastian Vettel following the deployment of a virtual safety car

Lewis Hamilton missed out as Sebastian Vettel emerged victorious in Melbourne (AFP)

Lewis Hamilton's defeat at the season-opening Australian Grand Prix has left Mercedes with a "bitter pill to swallow" after their costly mistake gifted victory to Ferrari's Sebastian Vettel.

Defending champion Hamilton was cruising to the chequered flag at Melbourne's Albert Park after winning the dash to the opening bend and sustaining a comfortable lead over the chasing pack.

But Formula One's curtain raiser turned on its head in the space of a dramatic few minutes after Hamilton was leapfrogged by Vettel following the deployment of a virtual safety car (VSC).

Hamilton's Mercedes team calculated that the Briton, who unlike Vettel had already made his single stop for tyres, would re-take the lead in the case of a VSC period.

But when the VSC - in which the drivers have to run at a restricted speed - was deployed after Romain Grosjean stopped in a dangerous position, Vettel emerged from the pits half-a-second clear of a stunned Hamilton.

"This was the one that got away and it is a bitter pill to swallow," said Mercedes boss Toto Wolff. "Following Lewis' pit stop, we believed that we had the scenarios of the safety car and virtual safety car covered and that Sebastian could not pit and come out ahead of Lewis on track.

"We should have been several seconds safe, but then suddenly saw on the TV screens that we were not.

"The software or system we have been using for five years just gave us the wrong number. Lewis did nothing wrong. It was down to a software bug or an algorithm that was simply wrong."

Once the race resumed, Hamilton kept Vettel honest, but failed to trouble the Ferrari driver at a track where it is almost impossible to overtake.

Hamilton was shocked when Vettel emerged from the pits ahead of him (Getty)

The Englishman was magnanimous in defeat, but accepted that his team's error cost him a certain victory in the opening race of his title defence.

"I was in disbelief," Hamilton said. "I did everything I believed I was supposed to do. In the race, I had extra tools so I could have been further ahead by the first pit stop, and I could have been further ahead after it. There were so many good things we could have done.

"It is a team effort but when you are relying on computers, on data, and on so much technology for the right strategy, I wish it was more in my own hands.

"It is obviously never easy to lose a grand prix, and we still got second, but it feels like a dark cloud."