Toto Wolff says Mercedes left Monaco having seen 'the very real threat from Red Bull' and feels with previous mistakes still fresh in the memory his team has no room for further error heading to Canada.

The Mercedes boss was delighted to see Lewis Hamilton reignite the defence of the F1 world championship with victory in Monaco and hopes Nico Rosberg's 'whole lot of bad luck' is over after his disappointing outing at the Principality.

After continually warning about the threat posed from Ferrari at his team's dominance this year, Wolff is now keeping a close eye on Red Bull after it fluffed its opportunity for the win in Monaco due to a pit blunder.

With Daniel Ricciardo leading on track in drying conditions, the Red Bull pit crew wasn't prepared for the Australian's stop who was forced to wait in the pits for the right tyres to be found.

The time lost in the stop saw Hamilton nip ahead and duly secure the win to the frustration of his Red Bull rival.

Wolff says Red Bull's pace, with Ricciardo also claiming pole position in Monaco, has come as a major warning to Mercedes and is stressing his team must rediscover its irresistible form.

"Monaco brought us mixed emotions," Wolff said. "For Lewis, it was just what the doctor ordered. For Nico, a whole lot of bad luck in one race made it a tough afternoon. But the main thing we took away was the very real threat from Red Bull.

"It took a bold strategy, a big push from Lewis and an even bigger slice of luck with Daniel's slow pit stop to get us that win. I've said this many times before - but we have no breathing space in this Championship.

"Maintaining any advantage is a constant battle - and the pressure is only getting bigger. This unpredictable season has been great for the sport and shows that Formula One is alive and well. But, for us as a team, there is clearly work to do."

After reliability issues plagued Hamilton in the opening four races, with Rosberg suffering similar problems in Monaco, Mercedes suffered a heavy blow last month in Spain when both its drivers collided with each other.

With the Spanish Grand Prix clash put firmly behind them, Mercedes is looking to step up its reliability and performance to ensure both its drivers return to the rostrum together for the first time since Russia.

"There remains room for improvement in our reliability - but the push for more performance has become increasingly important too," Wolff added. "We saw the 50th Formula One win for the Silver Arrows in Monte Carlo, which is a great achievement. But if we are to build the long-term success that puts Mercedes-Benz up there with the iconic names of this sport, we will need to push harder than ever."