Its achievement is equalled only by the latest Renault Laguna – which was the first car to secure a five-star rating after it was tested in March 2001 – and gives it an important lead over other premium upper-medium saloons.
Other fleet favourites tested in the latest round include the Ford Mondeo, Opel Vectra and Jaguar X-type, all of which achieved four-star ratings.
The latest test includes seat-belt reminder assessment protocol, introduced in January, awarding a higher score if vehicles employ a visual and sound prompt when the seatbelt is not worn.
The C-class scored extra points for including a seat-belt reminder system as standard and its five-star rating gives the car an extra boost following price cuts and specification upgrades across the range.
Nick Ratcliffe, head of corporate sales at DaimlerChrysler, said: 'When we develop our products we put them through a rigorous crash test programme.
'The C-class has an impressive armoury of active and passive safety features, including ABS with ASR traction control, Brake Assist, ESP (Electronic Stability Program), two-stage front airbags, side impact and window airbags, and seat belt tensioners with force limiters. As a result of this, the C-class is an inherently safe vehicle in which to travel.'
However, manufacturers have been asked to take pedestrian safety more seriously after just one car tested – the British-built Honda CR-V – scored three stars for pedestrian safety.
Transport Minister David Jamieson welcomed the five-star rating for occupant protection of the C-class, and added: 'It is good to see that the Honda CR-V achieved three stars for pedestrian protection.
'However, the pedestrian rating scores for the other vehicles are still disappointing. I would like to see manufacturers do more in the important issue of pedestrian protection.'
Euro NCAP Crash Test
Mercedes C-class: five stars
Ford Mondeo: four stars
Jaguar X-Type: four stars
Vauxhall Vectra: four stars
Peugeot 607: four stars
Proton Impian: three stars
Audi A2: four stars
BMW MINI: four stars
Vauxhall Corsa: four stars
VW Polo: four stars
Honda CR-V: four stars
Range Rover: four stars
Jeep Cherokee: three stars
Vauxhall Frontera: three stars
Mazda MX-5: four stars
Mercedes SLK: four stars
Honda S-2000: four stars