Rossi's hopes of overturning Stoner's championship lead in the near future took a heavy blow when the Italian fell from his Fiat Yamaha on lap five of 30. The former five times MotoGP world champion had suffered a poor start from sixth on the grid, dropping to ninth on lap one, but quickly gained two places before struggling to pass Kawasaki's Randy de Puniet for sixth.
It was while attempting to squeeze inside the Frenchman that Rossi fell; the #46 losing the front of his M1 at low speed through a long right hander and sliding into the gravel. Rossi attempted to rejoin but was forced to admit defeat and walk from the gravel with his head bowed in disappointment.
Rossi came into the German Grand Prix 21 points behind Stoner and the Australian was immediately told, via his pit board, of The Doctor's demise. At the time, Stoner was holding a close second place behind Pedrosa, but soon began to fade back from the Repsol Honda rider - which initially seemed a sign that he was intentionally backing off.
By the halfway stage the Ducati Marlboro star sat 3.5secs behind Pedrosa, with fellow front row starter Marco Melandri 2.3secs from the Australian's rear wheel. While Pedrosa then kept his relentless pace for lap after lap, Stoner was clearly in trouble as his lap times dropped over two seconds behind the rampant Spaniard and, with ten laps to go, Casey had Melandri and his own team-mate Loris Capirossi queuing up to pass him.
Capirossi, in Stoner's shadow for much of this season, passed both Melandri and Stoner into turn one a lap later, with Melandri also soon ahead of the #27. That trio were all running Bridgestones, but as the race came to a conclusion it was clear that Michelin held the edge - Americans Nicky Hayden and Colin Edwards, who had started just 14th and 13th on the grid, scything past Stoner and Melandri in the closing stages.
However Stoner dug deep and, with Melandri also struggling for grip, repassed the Italian for fifth place with four laps to go and just held off both the Gresini Honda rider and Rizla Suzuki's John Hopkins at the chequered flag.
Fifth was Stoner's equal worst finish of the season, but Rossi's non-score means that the 21-year-old now sits 32 points in front of Rossi heading into next weekend's US Grand Prix.
Prior to Pedrosa's German triumph Laguna Seca 2006 was the scene of Repsol Honda's last grand prix victory (with Hayden) and the young Spaniard was unusually emotional at taking his long waited third premier-class victory - his voice breaking as he spoke to the press. Dani had crossed the line over 13 seconds ahead of Capirossi and was simply in a class of his own this afternoon.
Capirossi, currently locked in a Ducati-Kawasaki-Suzuki 'love triangle' for next season, was almost as delighted at finally returning to form, while Hayden's second podium of the season - despite a nightmare weekend - will boost his confidence heading to his home round, which he has won for the past two years.
Meanwhile, MotoGP's pole jinx remains intact, with Stoner - like all previous 2007 pole position holders - failing to take the win.
German Grand Prix: