LE MANS, France (AFP) - Peugeot recovered from a disastrous start to snatch the leading two places after seven hours of the 76th Le Mans 24 Hour Race on Saturday.

The Peugeot team, who had earlier seen pole-sitter Stephane Sarrazin's car slip six laps off the pace following gearbox trouble, were back in charge with French driver Franck Montagny nipping ahead of teammate Jacques Villeneuve, the former Formula One world champion.

Nicolas Minassian had handed over driving duties to Villeneuve but Montagny closed on the Canadian before taking the lead on lap 102.

Earlier, the lead Audi of seven-time winner Tom Kristensen, Allan McNish, the 1998 champion, and Rinaldo Capello had taken the lead from the stricken Sarrazin but after seven hours had slipped back to third overall.

The remaining Audis of Alexandre Premat, Lucas Luhr and Mike Rockenfeller and that of Frank Biela, Emanuele Pirro and Marco Werner in fourth and fifth respectively.

Sarrazin set the fastest lap of the race as he tried to recover from his disastrous start.

"We've never had this problem in the last two years, it's the race," he said.

"Now we have to give it everything. We have nothing to lose."

Villeneuve has an added incentive to win as he tries to become just the second man in history, after Graham Hill, to win the Triple Crown of the Formula One world title, Indy 500 and Le Mans race.