Mercedes boss Toto Wolff says the UK should feel proud to have a "champion and ambassador of the calibre of Sir Lewis Hamilton" after the Formula One driver was awarded with a knighthood.

Hamilton has been recognised in the New Year Honours list following a record-breaking year in which he eclipsed Michael Schumacher's all-time victory tally and emulated the German by winning a seventh world title.

The 35-year-old, who was also voted the BBC's Sport Personality of the Year earlier this month, is the fourth F1 driver to receive the accolade – following in the footsteps of Sir Jack Brabham, Sir Stirling Moss and Sir Jackie Stewart – and the first to be awarded the honour while still competing.

Austrian Wolff, 48, has overseen Hamilton's success at Mercedes following the Briton's move from McLaren in 2013. Hamilton has won six of his seven titles with the sport's all-conquering team.

"Lewis is one of the very greatest racing drivers of all time and the most successful British sportsperson of his era," said Wolff.

"Around the world, he has long been recognised for his sporting achievement, and this year, he combined his excellence on the track with a powerful voice to fight discrimination. In every sense, he led the way in 2020.

"The news that he is to receive a knighthood shows that he is now receiving the recognition he has earned during a career of unparalleled success in motorsport.

"The UK can be very proud to have a champion and ambassador of the calibre of Sir Lewis Hamilton."

Hamilton has not resided permanently in the UK since 2007, and his knighthood was included on the Diplomatic and Overseas List.

Hamilton moved to Switzerland for a year before taking up residence in Monaco.

Motorsport UK chairman David Richards sent a letter to Prime Minister Boris Johnson in November explaining that Hamilton "is subject to withholding tax at source in nine countries" and "files tax returns in four of the nine countries".

HMRC's UK Income Tax Liabilities Statistics, published in 2019, puts Hamilton among the top 5,000 highest tax payers in the UK.

Former Labour cabinet minister Lord Hain, who serves as Chair for the All Party Parliamentary Group for F1, twice wrote to Downing Street calling for Hamilton to be honoured with a knighthood.

He told the PA news agency on Thursday: "It is fantastic and well deserved news. This is a tribute to both the best Formula One driver in history and his fearless commitment to speaking up for diversity and against racism."

Hamilton clinched his record-equalling title against the backdrop of his personal fight against injustices.

Hamilton took a knee before all of the 16 rounds he contested, and persuaded Mercedes to change their livery from silver to black to send out a message in the battle against racism.

Damon Hill, world champion in 1996, told Sky News: "Lewis has stood up for issues that are close to his heart and affect everyone.

"In our sport it is very rare for a driver to get involved in anything that is outside of Formula One. But Lewis has said this affects every black person and he stood up at a time when it could have destabilised his career and destabilised his concentration on the championship.

"He took a huge gamble to do that and that is courage and that is standing up for what you believe is right."