Gronholm is going for his fourth win in the Swedish Rally

The two times world champion, driving a Ford Focus, is dominating the race and hopes to celebrate his 38th birthday with a victory in Sunday's final stage.

"We have a good lead now," Gronholm said. "Everything is working our way."

But Loeb, racing a Citroen for the Kronos team, took the final two stages to close the gap to 25.1 seconds.

"We are pushing as hard as we can, but Marcus is too fast," said Loeb - the reigning world champion.

Gronholm - who won the first round of the championship in Monte Carlo - and Loeb are well clear of the rest of the field.

Their nearest challenger, Daniel Carlsson, is two minutes 32.7 seconds off the lead.

Carlsson only received clearance to start the rally at the last minute after backing from his rivals.

The Peugeot driver spent all Saturday fighting Mitsubishi driver Gianluigi Galli, eventually ending the second leg of the rally with a slender 0.3-second advantage.

Former German Touring Car Championship (DTM) champion Mattias Ekstrom faces a stern test if he is to hold on to his fifth position.

The Red Bull Skoda driver is just 0.1 seconds ahead of Janne Tuohino, who put on a storming drive to move into the points in sixth in his Citroen.

He was helped by problems for the OMV Peugeot team, who suffered a corner to forget on Stage 11.

Henning Solberg, who had been on course for points, crashed, to be followed just a few minutes later by team-mate Manfred Stohl.

Solberg was able to continue despite heavy damage, dropping to ninth while Stohl incurred a five-minute penalty for being unable to complete the stage and now lies 16th.

Kristian Sohlberg is seventh while Thomas Radstrom, in another independent Subaru, moved back into the points, taking advantage of OMV Peugeot's problems to move into eighth.

Cumbrian teenager Matthew Wilson struggled on stage 10, when he set the 55th fastest time and lost three minutes.

As a result the 18-year-old lost ground overall and dropped to 17th in his Stobart Ford - 11 minutes off the pace set by Gronholm.