In a clear signal of a return to form in much warmer weather, with track temperatures at the newly asphalted Red Bull Ring circuit rising to 44 degrees Celsius, Ferrari showed superior pace and tyre performance as championship leading rivals Mercedes struggled.

Defending three-time world champion Lewis Hamilton managed to wind up third behind the Ferraris ahead of the Red Bulls of Australian Daniel Ricciardo and Dutch teenager Max Verstappen with Finn Valtteri Bottas sixth ahead of Williams team-mate Felipe Massa of Brazil.

But the session was overshadowed by championship leader Rosberg's crash, which saw the session red-flagged to a halt for 10 minutes. It was confirmed by the team that the German suffered a suspension failure.

Rosberg will face a five-place grid penalty after Mercedes decided to replace his car's gearbox.

Vettel also faces a five-place grid penalty after a gearbox change on his car.

Rosberg appeared to be pushing for a fast lap on a new set of ultra-soft tyres - on which both Mercedes men have struggled for performance - as he came out of Turn Two.

Hamilton had followed him out also on ultra-softs as Rosberg's Mercedes showed heavy left rear wheel vibrations as he ran wide across the kerb.

He seemed to be clear of the controversial yellow 'baguette' kerbs that were criticised so severely on Friday by Verstappen.

Rosberg's car suffered a rear suspension failure and he was thrown into a spin that saw him crash off the barriers on the left off the track before coming to a halt.

He was unhurt, but the session was red-flagged to a halt for 10 minutes during which the debris was cleared and an angry Rosberg gave vent to his feelings, waving his arms in frustration in the Mercedes garage.

His accident demonstrated clearly how difficult Mercedes were finding it to manage the ultra-soft tyres and extract good performance.

On re-start, Hamilton went out and clocked a lap in 1:07.7 to jump to fourth on the monitors, some way off the pace set by Vettel who did 1:07.098, another outright lap record at the Red Bull Ring.

In a final flurry of action, Hamilton kept off the kerbs and rose to fourth and then third before the chequered flag.

"We need to understand the problem with Nico's car, but it looks like there was a suspension failure on the kerb," said Mercedes technical boss Paddy Lowe.

"We need to make sure we're covered for the race."

Rosberg's misfortune may have handed Hamilton a chance to cut his team-mate's 24-point lead in the title race if he can take advantage in qualifying scheduled to take place later Saturday.