While Mikko Hirvonen continues to lead Telstra Rally Australia, maintaining his gap of around 27 seconds over Petter Solberg, Dean Herridge has dropped four places in Group N, and now lies 5th in the category, and ninth outright.

Herridge pushed to the limit over this morning's stages in the Bunnings forest complex, but simply couldn't match his overseas rivals.

"We're going flat out - there's nothing left," Herridge said as he departed Bunnings for the service break back in Perth. "We're taking some pretty big risks, but I think the other guys are taking even more chances."

Japan's Toshi Arai now leads the category, but Italian Marcus Ligato is catching fast and now trails Arai by just 22.5 seconds. Finland's Jari Matti Latvala and fellow countryman Aki Teiskonen have both passed Herridge as well.

Crews are now heading to the Mundaring area for two more stages, which look like being wet after a storm past over the area in the past hour. Following that they return to Perth for two final runs around the Gloucester Park super special stage.

Ford's Marcus Gronholm has moved up the leaderboard and is now 12th, and within three minutes of fifth place, while Chris Atkinson is 26th.

"There's no big problem, but I am taking things steady. I just want to put in some solid stage times, take no risks and look after the car for New Zealand," Atkinson said at service.

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