By Ian Ransom

MELBOURNE (Reuters) - Rafa Nadal's possession of three grand slams makes him the deserving favorite to win the Australian Open, arch-rival and defending champion Roger Federer said Saturday.

Federer defeated Nadal in three sets at the World Tour Finals in London to deny him the perfect signoff to a brilliant season, but the Spanish world number one's French, Wimbledon and U.S. Open crowns left the Swiss in little doubt.

"He should be favorite, he's holding three slams. I hold this one still, but, just!" the 29-year-old told reporters.

"Of course I won the World Tour Finals and I've been playing really well in the hard courts right now but he's been the one that's been dominating the slams really, and hardly (had) any tough matches really in the last three slams.

"That clearly makes him the favorite, I think. I don't have any problems not being the favorite."

Federer defeated Andy Murray in straight sets in last year's final to notch his 16th grand slam and quash doubts about his motivation amid his new duties as a husband and father of twin baby girls.

But after being sensationally dumped out of the quarter-finals of both the French Open and Wimbledon, pundits starting questioning whether his aura of invincibility was fading.

Federer answered them in part with a strong finish to the season and carries solid form into the year's first grand slam after winning the Qatar Open.


Although facing the possibility of losing at Melbourne Park, the first time he would not hold a grand slam since 2003, Federer was unfazed and said life wasn't all about the majors.

"It is what it is. It's not easy to win slams. That means I've done something quite extraordinary for many seasons," he said.

"The season's not over after that. Maybe you're not holding a slam, but you still have three more chances to win a grand slam.

"At the end of the day it's not only about grand slams, like what people make it out... The World Tour Finals is equally important; other tournaments are very important. I don't just purely gear up for the slams."

Appearing relaxed in a yellow pastel polo shirt, Federer said his arch-nemesis Nadal, who he trails 14-8 in a rivalry that his lit up the men's circuit, would be ready to play despite struggling to shake off a flu.

"Obviously the great memories from being here and playing some epic matches also, let's say, in Davis Cup with Lleyton (Hewitt), the finals here with Rafa, or the semis with (Marat) Safin that I lost here.

"I've had some amazing matches here. This is also where I got to world number one in 2004. It's been an amazing tournament for me really."

(Editing by John O'Brien)