Unbalanced grid faults are the most severe perturbations which degrade the performance of grid-connected inverter interfaced renewable energy sources (IIRESs). In this regard, this study proposes a novel control strategy that provides optimum use of the power capability of the grid-connected IIRES under unbalanced grid fault conditions. One of the major contributions to previous methods is to propose a fast and robust improved Virtual Park (VP) sequence extractor to implement the reference current generator (RCG). The dynamic response of the grid-connected IIRES has also enhanced thanks to the proposed VP sequence extractor. The computing of maximum active power injection and simultaneously amplitude of phase currents is embedded into a new algorithm based the RCG to meet the aimed control objectives. The controllability and minimisation of active and reactive power oscillations are also formulated and carried out with only one control parameter. Another contribution of this study is to prevent overcurrent issues with peak current limitation control. Reference for active power is online computed based on the maximum current injection at inverter capacity for overcurrent protection. The validating effectiveness of the proposed solution is performed by a comprehensive set of cases to show the shortcomings of previous similar studies.