World No.1 Roger Federer is savouring an emotional Australian Open victory, while predicting a bright future for defeated finalist Marcos Baghdatis.

Federer claimed the seventh grand slam title of his career when he beat 20-year-old Cypriot Baghdatis 5-7 7-5 6-0 6-2 at Melbourne Park on Sunday night.

The normally ice-cool Swiss was then engulfed by emotion, struggling to speak through tears as he was presented with the winner's cup by the last man to win all four grand slam tournaments in a single year - Rod Laver.

"I was just so happy and then all of a sudden I could not speak, I couldn't, it is really too much for me sometimes to do that," Federer later explained.

"It is really a dream come true every time I win a grand slam."

Federer said winning in Australia, with Laver watching, along with his Australian coach Tony Roche and the parents of his late former coach Peter Carter, was particularly poignant.

"Australia means a lot to me, I've had a few Australian coaches, obviously Rod Laver was on stage and I'm working with Tony," he said.

"I think it means a lot to him too, it's like winning Wimbledon, he was there too and I think it's very emotional for both of us and the work has really paid off.

"It's very emotional winning a grand slam but especially here in Australia and then Wimbledon especially."

Federer also praised Baghdatis for his surprising run through the tournament, with the charismatic youngster upsetting Andy Roddick, Ivan Ljubicic and David Nalbandian, before losing to Federer.

"It was a surprise that he played so well, but what a great story and I think we'll see much more of him, I hope so," Federer said.

Baghdatis, who will rise from 54th to world No.26 when the new rankings are released, described his fairytale run to a grand slam final - in only his 38th match in the professional ranks as a "dream come true".

"I just woke up at the end and it's fantastic," Baghdatis said.

"It's been two great weeks. I'm in the final, I played the final, I lost, it's just amazing.

"Thank you all very much."

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