Schumacher, who could also score a record 12th win of the season in Sunday's race, did not come out on track until the final 25 minutes, but immediately bettered last year's pole time, set by Renault's Fernando Alonso.

The German six-time world champion's time of 1:21.552 around the tight and twisty Hungaroring circuit was more than three-tenths of a second quicker than Ferrari team-mate Rubens Barrichello, who was second fastest.

BAR-Honda test driver Anthony Davidson finished third, but was the only other man to be within 1.4 seconds of Schumacher.

McLaren pair Kimi Raikkonen and David Coulthard were fourth and fifth fastest respectively with Juan Pablo Montoya sixth for Williams after narrowly avoiding contact with the tyre barriers in a spin after 17 minutes of the session.

Briton Jenson Button, back on track after a week of controversy following the announcement he will switch from BAR to Williams next season, was 10th quickest, one place ahead of last year's race winner Alonso.

Toyota driver Ricardo Zonta, making his debut for the team after replacing fellow Brazilian Cristiano Da Matta, ended 13th with test driver Ryan Briscoe eighth quickest on his first appearance of the year.

Jaguar's Mark Webber failed to set a lap time, while team mate Christian Klien compounded a difficult session for the team when he spun off in the gravel trap.

Minardi's Hungarian driver Zsolt Baumgartner suffered a disappointing start to his home race weekend when he was pushed down the pit-lane after encountering problems.