Loeb moves into the lead in Italy

Gronholm had earlier overcome surprise morning pace-setter Latvala by winning SS5, putting himself 5.3 seconds clear of the Stobart Ford driver, who nevertheless showed his continued competitiveness by setting the third fastest time in the stage.

Loeb was second quickest through Crastazza 2, and consequently moved past Henning Solberg into third, having already benefited when Petter Solberg dropped from third to fifth after being penalised for leaving service late due to problems with a brake caliper.

The world champion then gained another place as Latvala's superb run came to an end in Terranova 2, when he stopped near the start of the stage with broken suspension.

Although the Finn knew that he would have been hard-pressed to fend off the title contenders all weekend, he had hoped to at least capitalise on his favourable road position by remaining amongst the top three during leg one.

Shortly afterwards, Gronholm began to lose speed due to a broken damper, allowing Loeb to close to within 2.7 seconds. The Ford then continued to struggle through the final stage of the day, while Loeb took a second successive stage victory and put himself on top of the leaderboard by a commanding 22.4 seconds.

Gronholm held onto second by 6.7 seconds from teammate Mikko Hirvonen, who picked up his pace this afternoon and made rapid progress from his earlier seventh position.

But Stobart Ford's Henning Solberg remains in contention for the podium, having set top four stages times throughout the loop. He will start leg two just 3.2 seconds behind Hirvonen's works car.

Another difficult afternoon for Subaru saw Solberg steadily fall away from the front-runners and into a distant sixth position, while his teammate Chris Atkinson retired from seventh after going off the road in Terranova 2.

The retirements ahead moved Dani Sordo up to fifth. Like Hirvonen, the Citroen number two gained ground as he settled into the event, and took the third fastest time in SS6.

Toni Gardemeister now holds seventh in his Mitsubishi, with Manfred Stohl perplexed by his Kronos Citroen's handling again in eighth.

Pos  Driver         Make       Time
 1.  Loeb           Citroen    1h42:10.0
 2.  Gronholm       Ford       + 22.4
 3.  Hirvonen       Ford       + 29.1
 4.  Solberg        Ford       + 32.9
 5.  Sordo          Citroen    + 01:18.3
 6.  Solberg        Subaru     + 01:21.0
 7.  Gardemeister   Mitsubishi + 02:04.2
 8.  Stohl          Citroen    + 02:35.8
 9.  Wilson         Ford       + 03:34.9
10.  Mac Hale       Ford       + 04:38.3