Peugeot #1 Marcus Gronholm has taken the early lead in Cyprus today [Friday], despite clutch problems at the end of stage four.

The Finn inherited the advantage from reigning World champion Petter Solberg in the same test.

Solberg - who led throughout the morning with two stage victories - ultimately dropped to eleventh when the Subaru engine went into 'safe' mode after the radiator filled with sand - prior to that he had been comfortably leading, by around five seconds, and seemingly poised to repeat his form from last year.

Gronholm was pleased with his position at the end of the leg, but cautious that there are still two long days to go.

"I'm very happy to be leading - this is something that I am always trying to do! Of course, the problem with the clutch was a big handicap on the last stages, especially because one of the starts was facing uphill. But on the whole the car has been excellent throughout the day, and has given me a lot of confidence in these very rough conditions," he said. "But there's a long way to go and we can take nothing for granted. Tomorrow we must keep pushing."

Solberg meanwhile who hit problems has dropped way out of contention. He cleaned the radiator at the end of the stage four with drinking water but the problem arose again on the next two stages. He had to stop briefly during the penultimate test and dropped more than nine minutes in total to lie eleventh.

"It was going really well,2 said the Norwegian, "Everything was going according to plan and then we had a small problem that cost us nine minutes. It's very upsetting to lose so much time over such a small thing, but that's the way it is and I just have to accept it. It's so disappointing after such a good feeling, nice control in the car and no worries. But, for tomorrow and Sunday I just have to do the best I can and see what we can do."

Gronholm's team-mate Harri Rovanpera holds second to give Peugeot a potential perfect result, while Sebastien Loeb has climbed to third after team-mate and former Cyprus Rally winner Carlos Sainz lost time with tyre woes in the final stage of the leg.

"It's been an excellent day for me," commented Rovanpera. "The conditions were difficult, but I have nothing in particular to complain about. The car has felt very strong and we have been able to push at a good pace without taking any stupid risks. There are so many big rocks here that you can have a problem very quickly. That's why it's best not to think too much about what will happen next - it could be anything!"

Ford's hopes of a top result lay in the hands of Markko Martin, the Estonian fourth overall and upholding team honours after Francois Duval was forced into retirement in the first stage after losing the front left wheel.

"There were no lines for us to follow this morning so it was quite difficult. I started with the aim of keeping out of trouble and I didn't consider then how much time I could lose," explained the Estonian. "Even though we dropped 40 seconds I thought it would have been worse. It's hard to regain lost time but we had only done three stages and the tests this afternoon used the same roads, so they were clean. We had a small differential problem this afternoon. But the second loop was much better for us than this morning, although the second pass through the long stage was incredibly rough. Overall it's been a good day. Tomorrow we will have a much better road position, which will ensure cleaner lines. The people starting behind us will have a small advantage only."

With Sainz dropping to fifth, the final top six position is held by Mikko Hirvonen in the lead Subaru.

"Well, It's been another day of learning for me and more experience in the car," said the Finn, "We had a trouble free run and I think I've learnt a lot. I'm certainly not happy with my pace at the moment, but going flat out isn't really the immediate objective. I was happiest with the last stage [SS6] and I'm hoping there will be more improvement tomorrow."

Of the rest Janne Tuohino head the 'privateers' in seventh, while Mitsubishi's Gilles Panizzi, Henning Solberg and Anthony Warmbold completed the top ten.

Panizzi was unhappy with his suspension this morning but team-mate Kristian Sohlberg suffered worse. His car's sump guard broke on the second stage, costing more than 2 minutes 30 seconds and a slipping clutch throughout the afternoon cost another 11 minutes. He is 16th.

Mario Fornaris, technical director at Mitsubishi, said: "I am quite happy, firstly because we have two cars that have made it through the day's stages and secondly because we have made improvements during the day. I cannot say we are totally happy with the car, but we are understanding more and getting the experience and for that I am happy."

Despite the Cyprus Rally only qualifying for full FIA World Rally Championship points, a host of Group N drivers are vying for honours in this highly-competitive category. Local man Andreas Tsouloftas currently leads the contenders in his Lancer Evolution [14th overall] with no fewer than four other Lancers at the top of the Group N leaderboard at the end of a long, dry and dusty day of competition.

In total 38 cars started today's leg, and seven retired.

The second leg tomorrow [Saturday] covers similar twisty gravel tracks and is again based out of the service park in Lemesos. It follows the same format as today, with two identical loops of three speed tests. They are located further south, close to Mt Olympus, and further west in less mountainous areas towards the coastal resort of Paphos. After leaving Lemesos at 07.45, competitors return for the final overnight halt at 18.57 after 109.56km of competition.