Loeb has been in fine form on the Mediterranean Island's asphalt

The world champion, who won every stage here last year, won two of the day's four stages in his Citroen Xsara.

Ford's Gronholm, winner of the season's first two rallies but now nine points behind the Frenchman after four rounds, has won only Friday's second stage.

Loeb's Kronos Racing team-mate Dani Sordo is in third place overall.

Spaniard Sordo won the eighth stage with a time almost five seconds quicker than Loeb to move 5.7 seconds clear of Mikko Hirvonen in fourth.

My feeling with the car wasn't 100% this morning and I don't think I drove all that well Marcus Gronholm

France's Alex Bengue, driving a BSA Peugeot, was fifth.

Despite losing a place to Sordo, Finland's Hirvonen remains confident that he can claim a podium spot on Sunday.

"The fight goes on. I enjoy a good battle," he said.

"We made some set-up changes to the centre differential last night and in turning the Focus feels more agile now."

Loeb said: "I was very cautious in all the right corners and I really followed Marcus' pace."

Gronholm, for his part, was not happy with his car early in the day and changed it after the opening special.

"My feeling with the car wasn't 100% this morning and I don't think I drove all that well," said the Finn.

Petter Solberg's hopes of cutting Loeb's lead in the championship standings ended on Friday after the Norwegian's Subaru went off the track during the first stage.

The former champion, trailing Loeb by 26 points, lies more than five minutes off the pace in 11th place.

Standings after day two of the Rally of Corsica: