Melandri was the 250cc world champion four years ago

Italian Melandri weaved his way past the Honda of race leader Dani Pedrosa on lap 24 to take top spot.

Ducati's Loris Capirossi took second with Spaniard Pedrosa in third.

Defending champion Rossi, who has just one win to his name this season, was in control before his bike lost power on lap 21 at Le Mans' Bugatti circuit.

The Yamaha team had spent the last week solving problems with the bike's chassis and so the latest setback hit Rossi hard.

The Italian was unable to dismount for several minutes after his second successive retirement and looked dejected as he left the track.

I'm lucky because Valentino blew his engine and Dani dropped his pace down a bit Marco Melandri

Rossi's misfortune saw him drop to eighth in the overall standings on 40 points.

Championship leader Nicky Hayden, who has been ill all weekend, finished fifth behind Casey Stoner and saw his lead cut to just four points.

"I was confident of having a good race but the weather was so difficult," said Melandri.

"I knew I was not so fast at the beginning but once my tyres got working I was quite fast and coming up on the leaders.

"I'm lucky because Valentino blew his engine and Dani dropped his pace down a bit (because of his tyre choice) but I just want to be happy with my own victory."

Local favourite Randy De Puniet retired after a spectacular crash on the first curve, as he went over the handlebars, and Suzuki's John Hopkins finished last after skidding off when cornering.

Results from the French MotoGP:

1. Marco Melandri (It) Honda 44:57.369
2. Loris Capirossi (It) Ducati 44:59.298
3. Dani Pedrosa (Sp) Honda 44:59.638
4. Casey Stoner (Aus) Honda 45:02.863
5. Nicky Hayden (US) Honda 45:03.078
6. Colin Edwards (US) Yamaha 45:08.888
7. Makoto Tamada (Jpn) Honda 45:14.061
8. Sete Gibernau (Sp) Ducati 45:15.511

Overall rider standings:
1. Nicky Hayden (US) Honda 83
2. Marco Melandri (It) Honda 79
3. Loris Capirossi (It) Ducati 79
4. Dani Pedrosa (Sp) Honda 73
5. Casey Stoner (Aus) Honda 65
6. Colin Edwards (US) Yamaha 45
7. Toni Elias (Sp) Honda 44
8. Valentino Rossi (It) Yamaha 40
9. Sete Gibernau (Sp) Ducati 33
10. Makoto Tamada (Jpn) Honda 33
11. Shinya Nakano (Jpn) Kawasaki 32
12. John Hopkins (US) Suzuki 21
13. Kenny Roberts Jr. (US) KR211V 20
14. Chris Vermeulen (Aus) Suzuki 19
15. Carlos Checa (Sp) Yamaha 15
16. Randy de Puniet (Fr) Kawasaki 8
17. Alex Hofmann (Ger) Ducati 6
18. James Ellison (GB) Yamaha 5

25Occ race result:
1. Yuki Takahashi (Jpn) Honda 43:42.773
2. Andrea Dovizioso (It) Honda 43:42.871
3. Shuhei Aoyama (Jpn) Honda 43:44.988
4. Hiroshi Aoyama (Jpn) KTM 43:25.257
5. Alex De Angelis (SM) Aprilia 43:54.043

Overall standings:
1. Andrea Dovizioso (It) Honda 92pts
2. Hector Barbera (Sp) Aprilia 78
3. Hiroshi Aoyama (Jpn) KTM 75
4. Yuki Takahashi (Jpn) Honda 67
5. Jorge Lorenzo (Sp) Aprilia 63

125 cc race result:
1. Thomas Luthi (Swi) Honda 42:54.555 sec
2. Mika Kallio (Fin) KTM 42:57.935
3. Fabrizio Lai (It) Honda 43:04.362
4. Alvaro Bautista (Sp) Aprilia 43:05.344
5. Pablo Nieto (Sp) Aprilia 43:09.405