After a stunning drive in the final stage today. Sebastien Loeb has set up a Sunday drive like no other in the battle with Marcus Gronholm for the FIA World Rally Championship.

Loeb (Citroen), the current world champion, has trailed arch rival Gronholm (Ford), the current series leader since the first stage yesterday in the 38th Rally New Zealand.

 The Frenchman put his championship on the line with a dare-all final stage in the North Waikato to emerge with a 1.7 second advantage for the final seven stages tomorrow.

The Rally New Zealand champion has often gone on to win the World Championship, and with Gronholm (Finland) leading by just eight points coming into Round 11 in New Zealand, tomorrow's result may have a significant bearing on the overall race for world honours.

"The gap is not big for tomorrow. It will be a hard Sunday, not a Sunday drive like usually," Loeb said after his final stage drive over the 32.36km Te Akau North stage where he was a stunning 5.4 seconds faster than Gronholm.

"I took perhaps a bit too much risk in that stage but okay we are here. I made a few mistakes but we are still on the road - just. This time it was very lucky but I am happy to be here. I pushed really hard and couldn't do better," Loeb said.

Loeb won four of today's six special stages, with the other two going to Gronholm - just - as he saw his 13 second buffer at the start of the day slowly whittle away.

It may have been a mistake by Gronholm on the final stage that allowed Loeb back into the race.

"At some point I hit the front fender and the car started to shake. But after that I had to slow down and after the split came, it was three seconds immediately. I could survive but I think it is a puncture and also in the rear," Gronholm said.

"I have to go hard tomorrow and really go as fast as I can and find something in the car now."

Gronholm began the day with a 13 second advantage with he and Loeb sharing the spoils on the first two stages at Port Waikato and Possum - named after the Franklin region's most famous motorsport hero.

Then Loeb struck, with the right tyre choice on the pivotal Franklin Special Stage Eight, where he was more than 11 seconds quicker than Gronholm and reduced his deficit to under four seconds. Game on.

They were both quick around the Super Special Stage at Mystery Creek before the mid-day service with Gronholm winning the stage by 0.4 seconds after Loeb hit an archway and touched the barriers on the exit of a corner.

Both were stunningly fast on the first of the Te Akau stages in the afternoon before Loeb made his move.

It remains a two-horse race with Gronholm's Ford teammate Mikko Hirvonen 1min 12.5sec back in third.

"My performance Friday morning I was not happy but now it is okay. Right now we are really not pushing too hard and we are fast. Shame we lost time on Friday but now we are doing really well," the Finn said.

Fellow Ford and Finn Driver Jari-Mati Latvala pushed up to fourth, 2 minutes behind the leader and is 10 seconds ahead of Subaru's Chris Aktinson, who is comfortably ahead of his teammate and 2003 world champion Petter Solberg. He is still at odds with his troublesome Subaru.

The battle for honours in the Production Car World Rally Championship continued to wax and wane, with stage eight pivotal again this year with early leader Juho Hanninen (Finland)  rolling and Armindo Araujo (Portugal) suffering from a broken differential.  The lead was assumed by Niall McShea (Great Britain) followed by Argentina's Gabriel Pozzo.  The fortunes of New Zealand Champion Richard Mason rose and fell after climbing from eighth place to second before dropping back to fifth when his car was stuck in second gear on the last stage.  The leading Group N driver overall is Scotland's Alister McRae who also won the Vantage Aluminium Rally Championship Round followed by Sam Murray and Mason.

There are six special stages tomorrow in the Raglan area including the world famous Whaanga Coast before they return for the final super special stage at Mystery Creek which may just decide the Rally New Zealand champion.