Horner's Red bull team dominated the sport from 2010 to 2013

Mercedes are "absolutely favourites" for the 2017 Formula 1 title, Red Bull team boss Christian Horner believes.

The world champions will still be the team to beat despite new rules and the problems they are having replacing title winner Nico Rosberg, Horner says.

"Mercedes have a few things going on with drivers and technical staff but they have a very strong team," he said.

"It will be interesting to see who they opt for in their spare seat because their options look relatively limited."

Rosberg announced his retirement five days after winning his first world championship last month and Mercedes have approached Williams in the hope of persuading them to part with their Finnish driver Valtteri Bottas.

But so far no agreement has been reached and Mercedes' fall-back option remains their reserve driver Pascal Wehrlein.

Horner, who was speaking to BBC Radio 5 live for the BBC F1 Christmas review show, was also referring to the likely departure of Mercedes executive director (technical) Paddy Lowe to Williams.

But he said that he believed either Bottas or Wehrlein were potential front-runners if the Mercedes car is competitive.

Mercedes reserve driver Pascal Wehrlein raced for Manor last season

"You give these guys a chance," Horner said. "Let's see what people can do in a front-running car.

"If they did take Wehrlein or Bottas, both are probably both capable of running right at the front, you just don't know until you give them the chance, which is what we did with Sebastian Vettel, and Daniel Ricciardo.

"A lot of people were saying we should take Kimi Raikkonen at the time we took Ricciardo. Until you give them the chance, you don't really get to see if they can cut it at the front."

Carlos Sainz, who races for Red Bull junior team Toro Rosso, has also been linked to the Mercedes seat. The world champions are said by a source to have expressed some interest but have not made a formal approach for him.

But Horner said neither he nor lead Red Bull drivers Ricciardo and Max Verstappen were available.

"Why would we do that?" Horner said. "Carlos has done a great job. He is a Red Bull driver. We have invested in him to get him into F1 and they are all on long-term contracts so it wouldn't make any sense to feed one of your main opponents with one of your assets."

Horner said that the team may have approached differently the last race of 2016 has they known of Rosberg's decision - Mercedes ordered Hamilton to speed up when he was trying to back Rosberg into rivals.

"The problem is this call has come so late in the day and they obviously weren't expecting it. They would probably have supported Lewis a bit more in the last race if they'd known this was going to happen.

Up close and personal with F1 driver Pascal Wehrlein

"They will know the contractual situations of the drivers they are involved with but their choices are pretty limited."

Asked for his view on Rosberg's decision, which came only four months after he signed a new contract with Mercedes to the end of 2018, Horner said: "It's a personal thing.

"He was probably concerned that if he told them before the event they would perhaps have not been as enthusiastic for him to win the championship.

"So you can understand it from a personal point if view.

"But of course that doesn't serve the best interests of the team, it's a very late call. He only signed a contract a couple of months ago. Then he was obviously happy to continue and then had a change of heart."

Listen to the BBC 5 live F1 review show on 21 December at 21:00 GMT and 24 December at 12:00 GMT.