Damiano Cunego (Lampre-ISD) lost contact with the front group of overall contenders a kilometre from the spectacular summit finish on the Galibier but dug deep to finish just 26 seconds behind Frank Schleck.
With Alberto Contador and Samuel Sanchez finishing almost a minute and half behind, Cunego rose to fifth place overall, 3:46 behind Thomas Voeckler but only 2:38 behind Frank Schleck and a possible place on the final podium in Paris.
Cunego is locked in a personal battle with fellow Italian Ivan Basso. The Liquigas-Cannondale team leader managed to finish 22 seconds ahead of Cunego and so they are at the same time in the overall classification.
"The queen stage of the Tour lived up to expectation and I'm very happy to be up there to play my hand with the best riders in the race, Cunego said after returning down the Galibier climb to the Lampre-ISD team bus.
"I suffered like hell but I was worth it after moving up to fifth overall. Being so high up is going to give me even more motivation for the final stages, starting with L'Alpe d'Huez tomorrow. It'll be important to recover quickly the energy we spent today because the stage is short but will be very hard. That's a tough mix to handle."
Cunego will hope to gain more time on the finish to L'Alpe d'Huez to build a cushion before Saturday's time trial in Grenoble. He currently leads Alberto Contador by 58 seconds and probably needs double that to hold off the Spaniard.