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World champion Sebastien Loeb was virtually handed victory in Rally New Zealand today after a disastrous penultimate stage for two of his closest rivals.

The Frenchman, fourth overall going into the second running of the picturesque 29.72km Whaanga Coast stage, had conceded he had no chance of the making up his 15.3-second deficit unless leader Mikko Hirvonen made a mistake.

"No, it's impossible to get the victory," he said.

"If Mikko is not making any mistakes, I think he will win. He was going very well this morning and I could not do much more."

As it turned out, Hirvonen spun dramatically near the end of the leg west of Hamilton to finish a massive 57.1sec behind Loeb.

Minutes earlier, Hirvonen's compatriot and Ford teammate, Jari-Matti Latvala, who had been second overall, had seen his challenge end after he hit a rock on the gravel surface and spun.

Latvala's car lost engine oil in the incident and he had to park it by the side of the road.

Loeb was fastest on the stage, overtaking Citroen teammate Dani Sordo to hit the front on total elapsed time, with the Spaniard 16.2sec back in second place.

Hirvonen was third, 41.8sec off the pace.

With just a 3.14km sprint at Mystery Creek to go, Loeb, who has won a record 41 rallies, is set to grab his third victory in succession after successes this month in Finland and Germany.

The 10 championship points he would get would open out his four-point margin over Hirvonen at the top of the drivers' standings and keep him on target for his fifth successive world title.

Loeb had seemed to have lost his chance of his second win in New Zealand when he had his own piece of misfortune on the morning's opening stage.

He spun and lost 10sec to go 17.7sec behind the leader.

"It was a long, long left and I went in the wrong camber," he said.

"When I pushed, the car was spinning, spinning, spinning, and I couldn't stop it. I lost a lot of time."

Meanwhile, Wairarapa driver Richard Mason's hopes of being the top New Zealand finisher for the third successive year were hit by a blown engine before the morning's second stage.

Until then, Mason was sitting an impressive 12th overall and was the first Group N competitor.

His misfortune left Cantabrian Hayden Paddon, the newly crowned national champion, as the leading local competitor.

- NZPA