Leg 3 am: Loeb retires as Panizzi leads

Loeb made it to the end of the stage having lost four minutes of time, but the car then stopped and he was forced to retire - the suspension broken on the Xsara. The Frenchman was lying fourth overall at the time.

Panizzi continues to head up the leaderboard with a 42.4sec advantage over his team-mate Richard Burns. Burns upset Panizzi's dominant run of fastest stage times this morning when he posted the fastest time on the first test of the day, the 12.90km La Trona I stage.

Panizzi appeared to have lost time on SS15, the final stage before service when he set the fourth fastest stage time. But the Frenchman had in fact temporarily stopped to perform a couple of doughnuts for the enthusiastic Spanish crowd! A sign of confidence the Frenchman has in his ability to win this event.

Philippe Bugalski still resides in third place, the sole remaining Citroen after Loeb's demise. The third Peugeot driven by Marcus Gronholm is fourth, the Finn slowly closing the gap to Bugalski during this morning's three stages. Gronholm is now 39.7sec behind the Frenchman as the teams head to the second service.

Petter Solberg lies fifth overall, the young Norwegian puting in a series of impressive stage times and was second fastest on SS14. Colin McRae had a disappointing SS13, the Scot setting a time outside the top 10. He now lies sixth overall, his team-mate Markko Martin just behind him in seventh.

Privateer Peugeot driver Harri Rovanpera has had an excellent start to leg three and lies eighth overall, with Toni Gardemeister in the Skoda just behind him in ninth place. Francois Delecour completes the top ten, his Mitsubishi seemingly running much better on the final leg. His team-mate Alister McRae is still struggling however and lies 14th overall.

The final three stages of the rally are a repetition of this morning stages. The teams then head back to Lloret de Mar for the finish at 1620 (GMT).