Vincent Kompany is convinced Raheem Sterling is now one of the best players in the world.

Sterling hit a 13-minute hat-trick on Saturday as Manchester City took another step towards defending their Premier League title with a 3-1 defeat of Watford at the Etihad Stadium.

There was an offside debate over his first goal and his second was a tap-in, but his third highlighted his skill as he weaved into the area, cut back and fired past Ben Foster.

City captain Kompany said: "It's incredible because his first year at City was tough, and then from the moment Pep (Guardiola) came in he just kicked on and went from strength to strength.

"For me, he is one of the best wingers in the world. He's so important for us. To have the ability to unlock defences when they defend with so many bodies is the sign of a top, top, top player."

Sterling's quickfire treble shifted what had been a frustrating game decisively in City's favour. As in their two previous games, the score was 0-0 at half-time and City, despite dominating possession, needed to work hard for openings.

City boss Pep Guardiola was more measured in his praise for Sterling, 24, who has now scored 20 goals for club and country this season.

"He scored three goals, we're delighted, but he can do better," said Guardiola.

"The first half was not the best performance from him, but it's good when not playing at the top level to be consistent and score the three goals."

Guardiola hailed midfielder Ilkay Gundogan as an "incredible player in all senses" but again expressed concern over the German's contract situation.

The 28-year-old has not been an automatic starter under Guardiola and has just one season remaining on his present deal.

Guardiola said: "I would prefer him to stay but at the same time I want to feel he wants to stay too. If he doesn't want to stay, he has to leave."

Guardiola was frustrated to be pulled into a debate about refereeing over Sterling's first goal. Sterling was initially flagged offside but the strike was eventually awarded because defender Daryl Janmaat touched the ball before him.

Arguments continued over whether the decision was the correct one and whether VAR might have helped. Guardiola pointed out, however, for such instances rules needed to be clarified first.

He said: "If you need the interpretation of the referee, always these types of situations will happen. If it's confused in the rules, that is the problem."

Opposite number Javi Gracia agreed.

He said: "I don't think VAR is the solution. I think first of all the solution is to have clear rules. After that, VAR can help referees."