In his quest for a record-breaking eighth F1 title, it appears Hamilton will not have it all his own way and is set for his closest battle since being beaten by team-mate Nico Rosberg in 2016.
"It's exactly what we want - to have Lewis up against Max," said 2009 champion Button, speaking on Sky Sport's F1 Show. "They are both extraordinary drivers.
"Team-mates fighting for a championship is great but when it's drivers from different teams, it's the best. It's exactly what Formula 1 needs right now."
Highlighting what he saw in the cars in testing, Button added: "Bahrain is an unusual circuit and it was very windy.
"But if the downforce is working at high yaw that is fantastic because that was a real weakness for Red Bull in 2020. So if they have that around Bahrain it's going to work everywhere.
"It's really exciting. Max, as always, is giving it his all, is at the top of his game, and I think he's really going to take the fight to Lewis."
Rosberg, meanwhile, still feels Hamilton is the favourite but is convinced he will not have been under such pressure going into a season for some time.
As to where he would put his money right now, Rosberg replied: "It still has to go on Lewis because nobody can fathom someone actually beating Lewis throughout the entire season on points. So, the money would still have to go to Lewis.
"But Max Verstappen, in particular, is as close as ever before in pre-season in terms of the odds to beat Lewis to the championship. I don't think anyone's been that close for many, many years."
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