Citroen's Sebastien Loeb has taken the overnight lead of Rallye Deutschland, the Frenchman pulling out a 26.5 second lead and looking comfortable enough in the Xsara WRC to claim his third consecutive victory in Germany.

Loeb, who leads the drivers' championship, dominated the day and set fastest times on each of the final five tests.

"It would be difficult to have a better day," he reflected. "However, that does not mean that it was easy. A damp road, then dry at the start, a road made dirty by the first pass through when we went through for the second time. About this matter, I must admit that the indications from the organisation's official gravel crews are useful. However, we are still constantly alert, which will be especially necessary tomorrow in Baumholder."

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Team-mate Carlos Sainz is however maintaining the pressure and the Spaniard inched into second position when Francois Duval dropped back after losing use of the Focus' automatic gearshift this afternoon.

The Belgian managed to hold on to third position, despite having to change gear manually and therefore being unable to use the handbrake.

"This afternoon was hard because the hairpins in the vineyards are so tight that you have to use the handbrake to get round them," he explained. "I had to reverse to get round hairpins six times and stalled the car three times. I think I lost about a minute."

Petter Solberg has had a trouble-free run to fourth position, while his Subaru team-mate, Mikko Hirvonen is down in 11th, the Finn lacking confidence in his first tarmac outing.

"There were no dramas today and everything was as I had hoped, except for the tyre choices," said Solberg. "We didn't have the best morning and there were some difficult conditions for everyone. We'd hoped for a little more rain this afternoon and maybe, if we'd chosen a harder tyre compound, we would have been fighting for some top times. But, I'm driving well, the car feels good on the asphalt and I'm pleased with its performance."

After struggling on the wrong tyres this morning, Markko Martin has powered from 13th to fifth, with Gilles Panizzi hot on his heels for Mitsubishi.

"It was very, very slippery in the stages this morning and we decided we will push when we can and play safer when the conditions are worse," commented Panizzi. "We made some small adjustments to the suspension settings at the mid-leg service and the feeling with the car was much better this afternoon and suited the road conditions more. In the last three stages I pushed very hard, close to the limit, and generally if things continue this way we should be in good shape."

Skoda meanwhile have again gone well, guest driver, Roman Kresta seventh, with Toni Gardmeister tenth, and Armin Schwarz 15th. Schwarz, who is starting his 100th WRC event, was sixth, until brake problems ruined his afternoon.

Skoda boss, Martin Muehlmeier stated: "To have two cars in the top 10 this evening confirms the asphalt performance of the Fabia WRC. Armin suffered from overheating brakes this afternoon and before then he was also in the top 10 so the result tonight might have been even better."

Alex Bengue lies eighth and Cedric Robert is ninth, in the lead 'works' Peugeot 307. Robert had been fifth, until he dropped 30 seconds second with a spin.

In the Production Car World Rally Championship category Mitsubishi are one-two, Xavier Pons 8.3 seconds up on Gianluigi Galli. Niall McShea is third, while Jani Paasonen and Alister McRae complete the top five.

In total 57 competitors completed the first leg, 69 having started this morning.

There were two major retirements.

Rally Finland winner, Marcus Gronholm was the first to go, crashing out on the first corner of the first stage. Having hit a patch of standing water, the Finn aquaplaned off the road, taking a wheel off the Peugeot in the process.

"Unfortunately, I slid off and retired on the very first corner of stage one. There was nothing I could do about it: we braked normally for the left-hand corner but there was a patch of standing water and we just aquaplaned off," explained the Finn. "The impact broke a hub and we were out. If we had still had gravel crews maybe they could have warned us about the hazard, but as it is we were passengers from the moment we touched the brakes. The car is not too badly damaged, so I think we will be starting again under the Super Rally rules tomorrow."

The only other 'works' retirement was the Mitsubishi of Daniel Sola - he went off the road and hit a tree 200 metres after the start of the second stage. Shocked by the accident, Sola and his co-driver, Xavier Amigo were taken to hospital for precautionary scans and x-rays but have since been discharged without any serious injuries.

Leg two, the longest of the event, starts tomorrow [Saturday] from Bostalsee parc ferme. The first car will leave at 0832hrs and complete a scheduled service before travelling 23.22km southeast for the first stage of the day.

Competitors will contest eight stages [four repeated] before a blast round the St. Wendel Super Special that evening, making a total of 177.66 competitive kilometres. The first stage is due to start at 0933hrs.