Loeb on top in Germany - just.

The fight for the lead of this eighth round of the FIA World Rally Championship went right down to this evening's superspecial stage in St Wendel, after a scintillating day's action on ADAC Rallye Deutschland.

Citroen Xsara WRC driver Sebastien Loeb and Peugeot's Marcus Gronholm spent today locked in a furious battle for supremacy. The Frenchman emerged at the head of the field after a trouble-free day in his car.

Gronholm's only problem had been a poor choice of tyres, but following his steady start to this event yesterday, the reigning world champion was happy to be right back in the thick of the battle for ten points.

The weather certainly played its part in a fascinating day, with rain through the middle stages causing problems for many of the crews who had elected to take slick tyres. The reverse was the case later in the day, when the majority of crews went into the final loop of stages on intermediates, only for the expected rain to hold off - until the superspecial.

Markko Martin made the most of his tyre choice to place his Ford Focus RS WRC03 in an amazing third. His fightback from an overnight tenth place was one of the talking points of the day.

More changeable weather is expected for the third and final leg of this Trier-based event tomorrow.

Citroen's Philippe Bugalski retired today after SS10 with turbo problems. The remaining three Xsara WRCs ran without fault for this second leg of the event.

Loeb moved into the lead when he posted fastest time on the second run at the Erzweiler stage. The Frenchman had eased his way past Richard Burns for second on the previous stage. Loeb spent the remaining three stages of the day trading seconds with Marcus Gronholm.

Colin McRae was also in the middle of a big scrap with Burns and Markko Martin for third place, he eventually ended the day fourth. Carlos Sainz was further down the leaderboard, not particularly enjoying himself on this event. The Spaniard was keeping out of trouble, however, in a points-scoring place and moving ahead of Francois Duval for sixth place on the final stage of the day.

Loeb said: ''I preferred it when the stages were dry today, but the times weren't so bad in the rain. For all four of the Baumholder stages today we have been pushing as hard as we can. We hit something with a front-left tyre on stage 13, we had a really big vibration after that.''

McRae noted: ''This weather has been a bit of a nightmare today. I wish it would just rain, if it's going to rain - it's the inconsistency that's the problem. Choosing a tyre in conditions like this is a complete lottery. We're going into stages on slick tyres and then, the rain comes; at the end of SS11 we were doing 70mph in top gear and the wheels were spinning - that's just dangerous.''

Sainz added: ''This is really not my favourite rally. Today I was glad to get out of Baumholder for the last time, but then again I think all of the drivers feel the same way. This event is not going very well for us, it's not one big problem - it's just one of those things. Some times we have rallies that go this way.''

At Peugeot Richard Burns' 206 WRC suffered a vibration on the suspension, while a change of pads cured Gilles Panizzi brake trouble. Gronholm's Peugeot ran reliably through the second leg.

Burns dropped back from the lead to become embroiled in a battle for third place, while Gronholm moved into a fight with Citroen's Sebastien Loeb for first position. Burns felt the handling of his car wasn't as good as yesterday and he slipped to fifth by the of the leg.

It was the reverse for Gronholm, he felt a lot more positive than in the opening leg. Panizzi dropped time after he took the wrong tyres for stages 12 and 13, using an intermediate tyres on a loop where the stages were largely dry.

Gronholm said: ''Today is better for me, but the weather is not good for the stages. We thought the first stage this morning was very slippery - but then the next stage was even worst, terrible - it is so hard to get the right tyres for this. Later today we took a cut in the tyre when we didn't need one, it all costs time.''

Burns commented: "I don't know where the time has gone today. The car doesn't feel right, it feels a lot more bumpy - I think it's something on the suspension, but I don't know. Yesterday the car was great, I had lots of confidence and now it feels more like last year's car.''

Panizzi, who ended the day eighth, added: ''The team changed the pads for me, this felt much better - I had more feeling from the car now. I have more confidence when the brakes are like this. Taking the wrong tyre was bad, though, the tyres were really moving about a lot.''

At Ford meanwhile both the Focus RS WRC03's of Markko Martin and Francois Duval ran without mechanical fault today - as did the 2002-specification car of Mikko Hirvonen.

Estonian driver Martin powered his way back up the leaderboard. He was fastest on three of the first four stages of the day. By the lunchtime service, Martin had transformed his overnight tenth position into fifth place. From there he met with more resistance, fighting with British pair Colin McRae and Richard Burns for third place.

Duval's day started well, with second fastest time on the Bosenberg stage. After that he slipped back behind McRae and team-mate Martin. By the end of the leg he was behind the battle for the third place, focused on his scrap with former team-mate Carlos Sainz for sixth spot.

Hirvonen continued to gain valuable experience of the stages to bring his Focus RS WRC02 home just outside the top ten, in 14th place.

''I took a wrong turning in stage ten,'' said Martin, ''My co-driver told me to go right, but I went left instead, suddenly there was no stage ahead - it was time for the handbrake, then we had a spin later in that stage. After that, things went well, I'm happy with the tyre choices we've made today. It's a shame there are no more Baumholder stages, they seem to suit me and the car. Compared to last year we are a gear higher in most corners than we were on this event last year. This is going to be a big fight for third tomorrow.''

Duval added: "We had a moment on the second stage this morning. I misheard a pace note from Stephane, which meant we went into a corner too quickly. I ran wide out of the corner, luckily the spectators were able to get out of the way pretty quickly. The we spun in SS13. Apart from these two problems, we've had a pretty good day.''

Hirvonen continued: "My confidence is getting better all of the time, I'm learning more and more all of the time. The only problem we've had today has been when the brakes were overheating a little bit.''

Petter Solberg's Subaru Impreza broke its rear suspension after a jump 15km into the 11th stage, while Tommi Makinen's car retired with an electrical fault after SS6 yesterday.

Solberg felt a little better today, but the winner of the seventh round of the FIA World Rally Championship dropped half a minute on the fourth stage of the day, landing his Impreza heavily after a jump. He'd dropped from ninth to tenth place, there was little he could do to stop Markko Martin coming past. The Norwegian admitted he was happier in the wet conditions.

Solberg said: ''The landing was no heavier than normal - I don't know what went wrong. I got out of the car to check everything and make sure it was safe to carry on. Later on in the day we took a tyre which was too soft, the tyres went off for us. Really it would be better if we got more rain, that would suit us better. I'm feeling okay - but not great.''

Team boss David Lapworth added: ''The landing broke the trailing link on the right-rear suspension, which is a part we haven't broken in all of the three years that we have been using it. We changed the complete corner on the car and then did the usual maintenance.''

At Hyundai Freddy Loix's car suffered a throttle problem early in the day, while Armin Schwarz battled against a faulty gearbox for the second loop of stages. The third official Accent of Manfred Stohl ran without problems.

Loix continued to lead the Hyundai battle, though the Belgian and his German team-mate Schwarz are only separated by a handful of seconds. They remain on the fringes of the top ten at the end of the second leg.

Stohl was happier today, having solved the transmission problems he had yesterday and regained the confidence he'd lost. Justin Dale was lying inside the top 20 in the fourth factory-specification Accent WRC when he went off into a concrete block in Baumholder. He's now just outside the top 30.

Schwarz said: ''The gearbox was strange, it was selecting different gears on one stage. Going down from fourth, it went straight into first - which locked the rear wheels and caused us to spin at the finish of SS10. After that we lost second and third gears. Once that problem was fixed, the car went well.''

Loix added: ''We had to turn the ALS off on the stages where we had the throttle problem [SS10/11]. It was hard to drive the car, it was idling between 3,000 and 4,000rpm. The other problem today was taking a tyre which was a little too soft for the penultimate loop.''

Skoda's Toni Gardemeister retired in SS12 with suspension trouble, while Didier Auriol went out on the superspecial stage last night.

Gardemeister started the day in 15th place, he made up some time on the next couple of stages - but dropped back when he damaged the left-rear suspension of his Fabia on the 11th test. The team worked hard to fix the problem, welding parts back together. Unfortunately for the team this repair did not last and the Finn joined the list of retirements on the following stage.

Gardemeister said: ''It is a real shame that we've retired. This morning the car felt good and I feel that the times we were setting were good. They might not have looked so good, but we were having a few problems - take those problems away and the times would have been really good. Now we have some more work to do before we go to Finland, but I'm really looking forward to my home event.''

Of the other entries Mitsubishi driver Dani Sola continues to lead the FIA Production Car World Rally Championship, but Marcos Ligato moved past Martin Rowe for second spot.

Cedric Robert is the top non-official driver, holding a top ten place and fellow Peugeot driver Czech Roman Kresta, made his day winning the Superspecial Stage of St. Wendel.

Rally statistics:

Starters: 66 crews (32 Group A and 34 Group N) started this morning.

Top retirements: Gardemeister (FIN), Bugalski (F), Paasonen (FIN).

Today - Saturday 26 July: Leg 2 started from Trier at 06h30 and covered 573.01km, including 169.38km on nine stages.

Tomorrow - Sunday 27 July: Leg 3 starts from Trier at 05h00 and covers 557.83km, including 101.54km on six stages. The first car is expected to arrive back in Trier, Porta Nigra, at 15h50.

Weather forecast: Cloudy with occasional rain.

Stage by stage summary - Leg two:

SS8 Bosenberg 1 (17.06kms):
1. Gronholm (FIN) Peugeot 9m 16.8
2. Duval (B) Ford 9m 20.7
3. Martin (EE) Ford 9m 23.0

Leaders after SS8:
1. Burns (GB) Peugeot 1h 18m 10.6
2. Gronholm (FIN) Peugeot 1h 18m 11.3
3. Loeb (F) Citroen 1h 18m 25.8

SS9 Peterberg 1 (10.43kms):
1. Martin (EE) Ford 6m 09.5
2. Loeb (F) Citroen 6m 12.6
3. Gronholm (FIN) Peugeot 6m 12.7

Leaders after SS9:
1. Gronholm (FIN) Ford 1h 24m 24.0
2. Burns (GB) Subaru 1h 24m 27.2
3. Loeb (F) Citroen 1h 24m 38.4

SS10 Erzweiler (19.88kms):
1. Martin (EE) Ford 11m 45.6
2. McRae (GB) Citroen 11m 48.3
3. Loeb (F) Citroen 11m 49.4

Leaders after SS10:
1. Gronholm (FIN) Ford 1h 36m 18.2
2. Burns (GB) Subaru 1h 36m 23.2
3. Loeb (F) Citroen 1h 36m 27.8

SS11 Pazerplatte West 1 (34.99kms):
1. Martin (EE) Ford 19m 31.9
2. Kresta (CZ) Peugeot 19m 47.9
3. McRae (GB) Citroen 19m 54.2

Leaders after SS11:
1. Gronholm (FIN) Ford 1h 56m 15.0
2. Loeb (F) Citroen 1h 56m 24.6
3. Burns (GB) Peugeot 1h 56m 43.2

SS12 Erzweiler 2 (19.88kms):
1. Loeb (F) Citroen 11m 40.6
2. Martin (EE) Ford 11m 42.7
3. Gronholm (FIN) Ford 11m 43.8

Leaders after SS12:
1. Gronholm (FIN) Ford 2h 08m 58.8
2. Loeb (F) Citroen 2h 08m 05.2
3. Burns (GB) Peugeot 2h 08m 38.2

SS13 Panzerplatte West 2 (34.99kms):
1. Martin (EE) Ford 19m 01.6
2. Loeb (F) Citroen 19m 01.8
3. McRae (GB) Citroen 19m 06.1

Leaders after SS13:
1. Loeb (F) Citroen 2h 27m 07.0
2. Gronholm (FIN) Ford 2h 27m 08.6
3. Burns (GB) Peugeot 2h 27m 45.3

SS14 Peterberg 2 (10.43kms):
1. Gronholm (FIN) Peugeot 6m 25.4
2. Loeb (F) Citroen 6m 25.7
3. Panizzi (F) Peugeot 6m 26.2

Leaders after SS14:
1. Loeb (F) Citroen 2h 33m 32.7
2. Gronholm (FIN) Peugeot 2h 33m 34.0
3. McRae (GB) Citroen 2h 34m 13.5

SS15 Bosenberg 2 (17.06kms):
1. Martin (EE) Ford 8m 56.5
2. Duval (B) Ford 9m 00.0
3. Loeb (F) Citroen 9m 05.1

Leaders after SS15:
1. Loeb (F) Citroen 2h 42m 37.8
2. Gronholm (FIN) Peugeot 2h 42m 45.1
3. Martin (EE) Ford 2h 43m 14.8

SS16 Superspecial St. Wendel 2 (6.65kms):
1. Kresta (CZ) Peugeot 3m 38.0
2. Schwarz (D) Hyundai 3m 39.2
3. Loix (B) Hyundai 3m 39.8

Leaders after SS16:
1. Loeb (F) Citroen 2h 46m 20.8
2. Gronholm (FIN) Peugeot +5.5
3. Martin (EE) Ford +34.8
4. McRae (GB) Citroen +45.3
5. Burns (GB) Peugeot +48.8
6. Sainz (E) Citroen +1m 54.6
7. Duval (B) Ford +1m 59.4
8. Panizzi (F) Peugeot +2m 19.2
9. Robert (F) Peugeot +2m 51.4
10. Solberg (N) Subaru +2m 54.2