Reigning FIA World Rally Champion Marcus Gr?nholm has strengthened his lead on the penultimate round of this year's series, the Telstra Rally Australia, which continued today.

The Peugeot driver and navigator Timo Rautiainen set two fastest times on this morning's opening pair of tests to more than treble their advantage over Richard Burns. They then consolidated their position with further fastest times this afternoon to end the day, with a 34.3s cushion.

The organisers' decision last night to not allow Colin McRae to nominate his start position for today (due to his late arrival at the selection process) affected the world championship leader badly, as he dropped nearly a minute to Gr?nholm and dropped to fifth. His Ford team moved Fran?ois Delecour took to the front of the field in an attempt to sweep some of the loose gravel off the road before the Scot. But the Frenchman crashed heavily in today's third stage, halting the test and hospitalising his navigator Daniel Grataloup with a shoulder injury.

At Peugeot Marcus Gr?nholm has been much happier with his car today, after Peugeot engineers changed all of the steering rack and power steering system at yesterday evening's final service. But team-mate Didier Auriol hit transmission problems on the day's second test, leaving the handling of his 206 snakelike on the faster sections. A change of all three differentials at the second service solved the problem. Harri Rovanper? was troubled by excessive tyre wear on his 206 on the opening pair of stages but his and Gilles Panizzi's cars ran without major problems.

Gr?nholm set fastest times on all of today's stages to extend his overnight advantage. The Finn has been more satisfied with his car's handling after a complete change of the steering rack and power steering system last night. Didier Auriol was slowed slightly by wayward handling on today's second stage. The problem was traced to a transmission glitch and solved by changing all three differentials at second service. Auriol was thus able to hold onto his third position. Harri Rovanper? lost time on today's second stage after wearing out his front tyres on the first, longer test but the Finn remains in a comfortable fourth overall. Gilles Panizzi found today's tests more difficult than yesterday's but the asphalt expert still holds eighth.

Marcus Gronholm said: ''It's much better today. Now I have a car that is just as I want it to be - the steering is more precise again, like it should be. I've been pushing quite hard today but I'm still not taking any risks. Tomorrow's a short day but a lot can still happen. I'm quite confident, though.''

Didier Auriol added: ''The car was incredibly bad to drive when I had the transmission problem. It was virtually impossible to keep it in a straight line - it was snaking everywhere. But the mechanics did a good job and it's working fine again. I don't know if we can catch Richard tomorrow but we'll keep pushing at this level.''

The Subaru Impreza WRC2001s of Richard Burns and Petter Solberg have been reliable today. Toshihiro Arai's car had to retire at the end of the day's first stage, though, after the Japanese driver hit a tree and his engine overheated.

Burns has been able to pull further clear of Didier Auriol today, but the Briton hasn't managed to match Marcus Gr?nholm's pace and as a result, he arrived back in Perth this evening in a relatively lonely second place. Petter Solberg, meanwhile, needed only one stage to move clear of Tommi M?kinen and into sixth overall but the pair have swapped seconds all day and the young Norwegian eventually finished the last forest test less than three seconds behind four-times world champion. Toshihiro Arai slid into a tree on this morning's first stage and although he and navigator Glenn Macneall reached the end of the test, their engine was too badly damaged to continue.

Richard Burns said: ''I thought I might lose time to Marcus on this morning's opening stage because I didn't think I drove very well but on the second one, I thought I'd do well and he did an incredible time. But we're not about to back off and give him an easier time. We have to keep pushing.''

His team-mate Petter Solberg noted: ''It's been going quite well. We had one mousse insert in the tyre break up this morning but it happened on the road section after the first stage. In some places where there are a few rocks I've been taking it cautiously because I don't want to risk getting a puncture, but when I push hard the feeling is very good indeed. All we can do is keep trying.''

Toshihiro Arai who retired during the first stage of the day added: ''The accident was my fault. I made a silly mistake going into a slow corner. I just got caught out on some slippery gravel and slid into a small tree. The front of the car was damaged and it didn't look too bad but some oil pipes behind the radiator were broken and we had to stop just before the finish of the stage.''

Ford's Colin McRae and Carlos Sainz had no major mechanical problems today, although Sainz suffered two mousse insert break-ups in his tyres this morning. Fran?ois Delecour's car ran reliably too until he slid off on the day's third stage and retired.

Fourth by yesterday evening, Colin McRae forfeited his right to choose an advantageous starting position for today when he was adjudged to have turned up too late for the nomination ceremony. So instead, the Scot was seeded at the front of the field and although Ford subsequently moved Fran?ois Delecour to the front in an attempt to sweep some gravel clear, the 1995 world champion knew before he started this morning that he faced an uphill struggle. It proved as much, although afternoon rain limited the damage on the final three stages. He still dropped to fifth, however, over a minute and a half behind leader Marcus Gr?nholm.

Carlos Sainz has spent today recovering after his problems yesterday - the Spaniard ended the leg in ninth overall. Delecour - who had to take a 13-minute penalty to move ahead of McRae on the road this morning - duly swept the road clear on the first couple of stages but on the third he clipped a tree on the inside of a corner and then hit a larger tree on the outside of the bend. Navigator Daniel Grataloup was sufficiently hurt for the stage to be stopped, although the Frenchman's condition was described as 'satisfactory' this evening. He has broken ribs, a broken right collar bone, a small break of the right shoulder blade and a small collapse of the right lung.

Colin McRae said: ''I don't understand why the organisers wouldn't let me choose my position on the road for today. I was where I was supposed to be when I was called up to make my nomination, but only then did I realise they wouldn't let me do it. All we can really hope now is to hang onto fifth because even if we manage that, we're too far behind the guys in front and they've now got road position advantage over us anyway. I feel very hard done by.''

Fran?ois Delecour noted: ''I was pushing hard - maybe too hard because I was running first on the road - and I clipped a tree on the inside and it threw me across the road into another tree. It was a fifth-gear place but quite narrow so we broke the tree on the outside of the corner. I stopped Colin as soon as possible because Daniel (Grataloup) was hurt and Colin and Nicky tried to help. It's a sad way to end my time at Ford.''

Meanwhile at Mitsubishi Tommi M?kinen suffered brake problems in this morning's opening, long stage. Freddy Loix, meanwhile, was 13 minutes late entering SS14 after a broken connection on the battery meant his Lancer wouldn't restart at the time control. He was penalised 2m 10s of road penalties as a result.

Tommi M?kinen lost time with his brake problems this morning and he also stalled and spun in SS15 but the Finn managed to reclaim sixth position from Petter Solberg on the last forest test. The four-times world champion reports far less aggravation from his back injury than yesterday, and his stand-in navigator Timo Hantunen has continued to adapt to his new role with increasing confidence. Freddy Loix kept his Lancer in the top ten until a broken electrical connection meant he was late into SS14, costing him 2m 10s of road penalties.

Tommi M?kinen said: ''It's been not too bad today - my back hasn't hurt very much because the stages have been quite smooth and flowing. The spin really puzzled me - under heavy braking, the engine just stalled. Sometimes that happens if the wheels lock up but they didn't, so I can't understand it. As for tomorrow, I really want to push to get a point from this rally.''

Freddy Loix added: ''We arrived at SS14 very early so I switched off the engine. But when I went to turn it back on again it simply wouldn't start. I could smell something that I knew was the battery so I prodded the connections with a stick and Sven (Smeets) tried to start the engine. Suddenly, it worked. I'm disappointed, though, because we were making progress.''

The Hyundai's Accent WRC2s of Alister McRae and Kenneth Eriksson have both performed reliably today. Again running near the front of the field, Alister McRae and Kenneth Eriksson have had to fight to keep their cars near the top ten. But the Scot benefited from Freddy Loix's problems to achieve exactly that, holding 10th overall after SS17. Eriksson has had a troublefree day but the Swede struggled again with loose gravel on most of the stages and he arrived back in Perth in 12th.

Kenneth Eriksson said: ''There has to be a better way of sorting out the running order. Use a brush on the stage beforehand or run this rally in winter when it's more damp and the roads don't have as much loose. We knew yesterday morning when we started the first stage that unless there were a lot of retirements, we didn't stand a chance and that's what's happening.''

Alister McRae added: ''The stages this afternoon were damp but while it made a difference, it wasn't big enough. If you look at how Colin's times compare to Marcus when they were so close yesterday, then you can see what a disadvantage we've had all rally.''

Of the other teams Oman driver Hamed Al Wahaibi continues to be the top privateer driver. The FIA Teams Cup entrant holds 13th in his Subaru, ahead of European champion Henrik Lundgaard. In the Group N class for more standard cars, local driver Ed Ordynski continues to hold the lead, ahead of newly-crowned category champion Gabriel Pozzo.

Rally statistics:

Starters: 63 cars (31 Group A + 32 Group N) started the rally Retirments: Yesterday: Bourne (NZ). Today: Arai (J), Bates (AUS), Delecour (F) + 4 other drivers

Today - Saturday 3 November: Leg 2 started from Perth at 05h50 and covered 696.52km, including 141.12km on seven special stages.

Tomorrow - Sunday 4 November: Leg 3 starts from Perth at 05h50 and covers 356.45km, including 105.69km on four special stages. The first car is expected to arrive at the finish control in Perth at 16h00.

Weather forecast: Cool, with strong possibility of showers.

Stage by stage summary - Leg 2:

SS11 Stirling East (35.48kms):
1. Gronholm (FIN) Peugeot 19m 38.8
2. Burns (GB) Subaru 19m 46.7
3. Auriol (F) Peugeot 19m 53.2

Leaders after SS11:
1. Gronholm (FIN) Peugeot 1h 45m 35.1
2. Burns (GB) Subaru 1h 45m 46.6
3. Auriol (F) Peugeot 1h 45m 53.3

SS12 Brunswick (16.63kms):
1. Gronholm (FIN) Peugeot 9m 08.5
2. Burns (GB) Subaru 9m 13.2
3. P.Solberg (N) Subaru 9m 17.4

Leaders after SS12:
1. Gronholm (FIN) Peugeot 1h 54m 43.6
2. Burns (GB) Subaru 1h 54m 59.8
3. Auriol (F) Peugeot 1h 55m 17.1

SS13 Wellington Dam (45.42kms): Cancelled.

SS14 Harvey Weir (6.97kms):
1. Gronholm (FIN) Peugeot 3m 47.8
2. Burns (GB) Subaru 3m 48.6
3. Rovanpera (FIN) Peugeot 3m 50.7

Leaders after SS14:
1. Gronholm (FIN) Peugeot 1h 58m 31.4
2. Burns (GB) Subaru 1h 58m 48.4
3. Auriol (F) Peugeot 1h 59m 08.8

SS15 Stirling West (15.89kms):
1. Gronholm (FIN) Peugeot 9m 20.0
2. Auriol (F) Peugeot 9m 26.2
3. Burns (GB) Subaru 9m 27.4

Leaders after SS15:
1. Gronholm (FIN) Peugeot 2h 07m 51.4
2. Burns (GB) Subaru 2h 08m 15.8
3. Auriol (F) Peugeot 2h 08m 35.0

SS16 Murray Pines (18.53kms):
1. Gronholm (FIN) Peugeot 10m 40.4
2. Burns (GB) Subaru 10m 48.8
3. Auriol (F) Peugeot 10m 51.3

Leaders after SS16:
1. Gronholm (FIN) Peugeot 2h 18m 31.8
2. Burns (GB) Subaru 2h 19m 04.6
3. Auriol (F) Peugeot 2h 19m 26.3

SS17 Langley Park Super 3 (2.20kms):
1. Auriol (F) Peugeot 1m 29.7
2. Gronholm(FIN) Peugeot 1m 30.0
3. Solberg (N) Ford 1m 30.1

Leaders after SS17:
1. Gronholm (FIN) Peugeot 2h 20m 01.8
2. Burns (GB) Subaru +34.3
3. Auriol (F) Peugeot +54.2
4. Rovanpera (FIN) Peugeot +1m 16.2
5. C.McRae (GB) Ford +1m 45.0
6. Makinen (FIN) Mitsubishi +2m 46.7
7. P.Solberg (N) Subaru +2m 47.1
8. Panizzi (F) Peugeot +3m 33.7
9. Sainz (E) Ford +4m 18.1
10. A.McRae (GB) Hyundai +5m 30.2