BP Ford Abu Dhabi's Jari-Matti Latvala leads Repco Rally Australia following the first loop - and he will now take a slim 1.1 second cushion into the mid-day service at Kingscliff.

The Finn, who began the day fifth following the two Tweed SSS on Thursday, took full advantage of his fourth-place starting position and took P1 on the second stage this morning, the 22.41 km Repco 1 test.

Latvala then continued to trade tenths of a second with early leader Sebastien Ogier and despite winning three tests from a possible seven, was unable to pull out much of a cushion.

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"I am very happy," said Latvala. "I am going to push hard through to the end. I started the rally okay, I had a scary moment in SS4, but I am going to try and keep going. The competition looks tough coming up."

Championship leader Mikko Hirvonen was the first to tackle the gravel coated roads and is placed fifth, 16.6 seconds off Latvala.

"The loose top layer is making it very slippery - we're sliding around," Hirvonen explained. "There is so much loose gravel - it just keeps getting easier as the roads clean up. I am surprised by how loose the road surface is. Even on the straights my wheels were still spinning. That must be the same for Sebastien [Loeb], too. I pushed hard to try and make up some time."

The morning's leg included the event's longest stage, Repco 1 at 22.41km. Here, Hirvonen led the field, despite his disadvantageous road position, tearing through the hard packed shire road in a time 4.3 seconds quicker than his team-mate Latvala.

Finishing no lower than third, Latvala's advantage is minimal over Ogier. The Frenchman won SS9 - "Ooh la la!" was his response - and with a string of three second-fastest stage times he is right behind the current 'top dog', and 11.3 seconds ahead of fellow Citroen drivers Dani Sordo and Sebastien Loeb.

Sordo took a stage win on SS5, while Loeb has been struggling with grip and the loose surface, with a best of second fastest on SS3 and a worst of fifth fastest on SS8 and SS9. The spread between Sordo in third, Loeb and Hirvonen in fifth is just 4.4 seconds.

Second placed overnight, Stobart Ford team driver Henning Solberg struggled to find a comfortable pace, slipping from second place to sixth, 38 seconds off the lead.

In the Production WRC, New Zealand's Richard Mason has moved into the lead and tenth outright in his Subaru ahead of Martin Prokop who lost around 15 seconds and his class lead on SS9 and slipped to fifth.

Bernardo Sousa's S2000 Fiat is placed second, just 3.9 seconds off Mason, while Neal Bates' Toyota S2000 holds third, 17.6 seconds off the P-WRC lead. Fellow Australia Cody Crocker's Subaru is 1.6 seconds behind in fourth, with Martin Prokop in fifth one second back.

With SS6 cancelled, the morning's remaining six stages were in contrast to the dry and sunny conditions of the last few days; skies were overcast and light drizzle was falling as the cars began the first of Friday's tests. Vision through dust has been improved by releasing the WRC cars at two-minute intervals instead of the normal 30 seconds.

Today's afternoon stages consist of three forest stages following the cancellation of SS11, then returning to Murwillumbah for the night's final two tarmac Tweed Super Special stages, totalling 23.54 competitive kilometres.