1. A method of controlling of an induction machine using an inverter with an output LC filter, comprising: determining an inverter output current vector ( i A ) determining an inverter output voltage vector ( u A ), forming a full-order observer having a system matrix (Â) and gain vector ( K ), the observer producing an estimated rotor flux linkage vector ( ψ R ), an estimated stator current vector (î s ), an estimated stator voltage vector (û s ) and an estimated inverter output current vector (î A ), determining an estimation error ( i A -î A ) of the inverter output current vector, forming a speed adaptation law based on the estimation error of the inverter output current vector for determining an estimate for electrical angular speed ({circumflex over (ω)} m ) of the induction machine, and controlling the induction machine based on at least one of the estimated rotor flux linkage vector, estimated stator current vector, estimated stator voltage vector and estimated inverter output current vector and a measured inverter output current.