The Citroen racer was placed third in the race standings when his DS3 careered off the gravel surface around seven kilometres into the third special.

Both Loeb and his co-driver Daniel Elena escaped injury but the same could not be said for their car, which ended up some distance from the road.

"The driver and co-driver are fine but the security roll bar is damaged and the team have had to abandon the race," explained Citroen Racing director Yves Matton.

He added: "Sebastien told me that he was going along at a normal not excessive pace when they arrived at the top of a hill followed by a right hand bend but he turned to the left.

Momentum

"We watched images of it and we reckon he was influenced by a slight turn left just before. He heard the instruction which he got at the right time but he didn't understand it."

"The road was dry and conditions were normal for this type of gravel rally. The car rolled, but there weren't any major bumps."

Loeb went into the rally full of optimism of maintaining the momentum in his push for a ninth title. He arrived in Portugal at the top of the overall driver's standings after wins in Monte Carlo and Mexico.

After Norway's former champion Petter Solberg claimed the day's first day time stage on the streets of Lisbon the drivers turned on the headlights for the three evening specials taking the pack from the start in the Portuguese capital and heading south towards the Algarve.

Solberg doubled up in the second special, completing the 10.19km run one-and-a-half seconds quicker than Ford's Jari-Matti Latvala to consolidate his overall lead.

With Loeb out of contention Latvala posted the quickest time in the day's closing special behind the wheel of his Ford Fiesta.

The Finn came in almost three seconds quicker than his team-mate Solberg to assume control of the overall standings going into Friday's second day, but only by half a second.