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Fernando Alonso extended his lead in this year's Formula One drivers' world championship on Sunday when he drove to a flawless victory for Ferrari in the German Grand Prix.

Driving with perfect judgement and great speed, the 30-year-old Spaniard started from pole position and dominated the 67-lap race in consummate style.

The Spaniard came home 3.7 seconds ahead of local hero, defending champion Sebastian Vettel of Red Bull, who was later handed a 20sec drive-through penalty for passing Jenson Button.

Vettel was handed the penalty for running off the track at a hairpin exit as he tried to pass McLaren's Button on the penultimate lap and dropped back to fifth place, leaving Button second at 6.949sec.

Finland's Kimi Raikkonen of Lotus completed the podium at 16.409sec.

Japan's Kamui Kobayashi of Sauber was fourth at 21.925 with Vettel slotting back into fifth at 23.732.

It was Alonso's third win this year after his triumphs in Malaysia and at the European Grand Prix, and it was also the 22nd consecutive race in which he had finished in the points for Ferrari.

He moves 34 points clear of Mark Webber in the title race with 154 points to the Australian's 120.

"We'll enjoy the win," said Alonso. "Starting on pole was the key factor because it was difficult to overtake and we were not the fastest but we kept the position."

Drawing a parallel with Europe's troubled economic situation, Alonso added: "I don't really know politics, but it is true that the situation is not great in Spain -- but a Spanish driver in an Italian car, designed by a Greek man is good to win here."

Button sidestepped the Vettel controversy and said: "I had a great race out there and it is nice to be fighting at the front again."

Vettel, whose Red Bull team were cleared to take part in the race after stewards decided to take no further action against them for reported engine mapping irregularities, said before the penalty was imposed: "The last thing you want to do is make contact. When we were side-by-side, I tried to give him enough room -- but it's difficult to see.

The 25-year-old said later, following his demotion: "I wasn't sure where he was, I couldn't see him in that moment, so decided to give enough space and went off line on the slippery paint and I was able to stay ahead and get past him.

"The only intention was not to crash and to give him enough room. I have respect for him and I didn't want to squeeze him."

Seven-time champion and German hero Michael Schumacher, 43, finished seventh for Mercedes ahead of Webber in the second Red Bull and another German, Nico Hulkenberg, who was ninth for Force India.

Another German, Nico Rosberg, in the second Mercedes, finished 10th.

Button's McLaren teammate Lewis Hamilton, who had hoped to mark his 100th Formula One race with a race to remember, ended up with one to forget as he collected a puncture after two laps and eventually had to retire.

A crash on the opening corner involving the Ferrari of Felipe Massa, Frenchman Romain Grosjean of Lotus and Brazilian Bruno Senna of Williams marred the start of the race but, surprisingly, there was no red flag following the incident.

As a result, a lot of debris was left on the circuit and led to Hamilton's puncture.

"I have no idea [how the car got damaged]. I saw the debris come up and it damaged it," said the 2008 world champion.

"The car felt terrible after that, the rear floor is damaged. The only positive I can take from this weekend is Jenson's result."

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