Importantly he has extended his lead in the FIA World Rally Championship to 10 points with five rallies remaining.

The world renowned Whaanga Coast stage near Raglan again proved the decider with Gronholm regaining the lead for the final time, while Japan's Toshi Arai climbed through the pack to gain the winning edge as he extended his lead in the Production Car World Championship.

The leading kiwi was two-time national champion Richard Mason who fought his way back for a second straight day to finish third in the PWRC and just clear of Sam Murray and Brett Martin.

But most attention focused on the world championship fight with Gronholm buoyed by his success.

"It was an incredible fight all weekend and this win is fantastic for my championship hopes," Gronholm said. "It's the closest and best battle in my career and I'm delighted to have won it.

"There wasn't room for a single missed gear change. It's good to extend my championship lead and I think it's going to be a great end to the season."

The arch rivals duked it out in a remarkable battle, with the sport's two prize fighters who were never more than an arm's length from each other throughout today's final seven stages.

Loeb started to the day with a 1.7s lead which he lost in the day's first stage before the Citroen driver regained it on the very next stage near Raglan. Gronholm was fastest in the next two stages, going ahead overall by 7/10ths of a second after the second pass of Whaanga Coast.

Loeb pushed to the limit in the final super special but after 353km of special stages and 900km of touring he ran out of real estate with just 3/10ths of a second separating him from glory - in front of a huge audience at Mystery Creek.

"We made a wrong tyre choice at Whaanga Coast in the second time. It was too hard. It rained a bit in this one so it was not a good tyre choice. Now we have to fight harder for the championship," Loeb said. "It was a hard Sunday and very close all day."

Ford's Mikko Hirvonen (Finland) scorched through the day alone in third place 1m42s behind the winner.

"The rally was okay for me. We had two very good days but the first day was forgettable, I was not in this race," Hirvonen said.

Subaru's Chris Atkinson (Australia) won the battle of the young guns, overtaking Finland's Jari-Matti Latvala (Ford) also on the final run through Whaanga Coast to finish fourth by less than five seconds.

"We tried our what-ever off in that one (Whaanga Coast) and we tried our hardest in the super special. It was a good result)," Atkinson said.

Citroen's Daniel Sordo (Spain) was fifth ahead of 2003 world champion Petter Solberg (Subaru) who was finally smiling today after a troublesome rally.

"Yeah it's much, much better today. They made some changes overnight. It was much better for me any way. At least now I can enjoy things. That was enjoyable," Solberg said.

Arai and kiwi co-driver Tony Sircombe climbed back from 11th place after a telling puncture on the opening day to win the PWRC and extend their lead in that championship to 24 points.

He did so with a brilliant second pass in Whaanga Coast to be 16 seconds faster than Great Britain's Niall McShea who was nonetheless delighted with the experience.

"It is an unbelievable rally - it's the best rally in the world by far. The stages and the people and the organisation are just the best," McShea said.

Mason had a similar story to Arai in his battle to finish third in the PWRC and 15th overall. He led the PWRC before a puncture on day one relegated him to fifth. He moved back up to second before a gear box issue dropped eighth yesterday, and he again impressed to finish third, albeit with a standard gearbox.

"We are very happy with that performance. Obviously the aim was to win but this sport is about how you fight back and we did that twice, so I am delighted."

Provisional points after 11 rounds of the FIA World Rally Championship:

Marcus Gronholm (Finland, Ford) 90, Sebastien Loeb (France, Citroen) 80, Mikko Hirvonen (Finland, Ford) 69, Daniel Sordo (Spain, Citroen) and Petter Solberg (Norway, Subaru) 31, Henning Solberg (Norway, Ford) 28.

Production Car World Rally Championship:

Toshi Arai (Japan, Subaru) 39, Mark Higgins (Scotland) 15, Gabriel Pozzo (Argentina, Mitsubishi) and Kristian Sohlberg (Finland) 12, Niall McShea (Ireland, Subaru) and Mirco Baldacci (San Marino, Subaru) 11.