Chris Horner (Radioshack-Leopard) lost the race leader's red jersey to Vincenzo Nibali (Astana) after the Italian produced an impressive performance in the hilly 38.8km time trial south of Tarazona.

Fabian Cancellara (Radioshack-Leopard) won the ride-off with Tony Martin (Omega Pharma-Quick Step) to win the stage but Nibali set the fourth fastest time for the course, stopping the clock in 52:25.

“I know that I gave the maximum today," Cancellara said. " It was a very hard parcours that was not perfect for a specialist, but I said to myself that I needed to do my race at my own pace and just find the right rhythm for myself."

The victory over reigning world time trial champion bodes well for Cancellara's ambitions to regain the rainbow jersey.

"This was a good test for myself that had nothing to do with my competitors and more about seeing how I’m feeling. It was both uphill and then downhill and required a good workout. I’m happy with my performance. I think I got the best out of myself today.”

"I'm happy about my race," Martin said. "I had to face lot of headwind but I maintained always a good speed. Even on the climb I did well. I think I had one of the best times at the top of it. Cancellara was really outstanding, congratulations to him. Concerning me, I think I did a good race. My condition is good and today it was another important step on the road to the worlds."

The general classification battle heated up after Horner finished 1:29 slower than Nibali and so slipped to fourth overall. He seemed to lack the power needed on the climb and on the fast descent back to Tarazona, setting a time of 53.54 and finishing 20th.

Nicolas Roche (Saxo-Tinkoff) strengthen his overall chances with a strong ride. He is now 33 seconds behind Nibali in the general classification. Alejandro Valverde (Movistar) also rode well, despite an early front wheel puncture and is now third overall, at 46 seconds, like Horner.

Nibali has worked hard to improve his time trial position during the season, narrowing his arms to make him more aerodynamic. It paid off during the time trial. The Italian opted to stay largely on the aero bars during the gradual climb rather than opening his arms to breathe more easily but create more turbulence. He then used his well-known descending skills to dive down to the finish.

Nibali was stung by an insect while studying the course on Tuesday and awoke with a swollen face but it did not seem to affect his performance and he now has control of the Vuelta as the decisive Pyrenean stages approach.

Astana team doctor Raquel Ortolano said the sting caused pain and inflammation, but no allergic reaction. "Nibali is not allergic to bee stings, but nevertheless his eyes and face were swollen overnight, and he was experiencing a lot of pain. In the morning the inflammation was not better, and the pain was not less, but by the time he got to the start he began to improve," Ortolano said.

Cancellara's world class performance

Fabian Cancellara has kept his plans for the world road race championships close to his chest, hinting that he could even miss the individual time trial. His stage victory could change his plans and see him target a fifth time trial world title as well as leading Radioshack-Leopard in the team time trial event and compete for the win in the road race.

Cancellara paced his effort carefully on the early uphill section of the course and then powered to the finish, setting a time of 51:00.

Martin was 37 seconds slower in second place. Domenico Pozzovivo (Ag2r-La Mondiale) produced the surprise performance of the day, finishing third, just 1:24 down on Cancellara.

"I'm real happy for the performance and I'm really, really happy to have won. I'm on the good way to where I want to achieve the big things," Cancellara said in his unique form of English.

"I looked at many thing (when comparing the course to that of the world championships). The parcours is really different. This has a lot of uphill and downhill. I showed that I'm up there with the climbers too, like Nibali. But I focused on myself today. I didn’t look at Tony Martin's ride because you have to focus on yourself. We also had rest day too and so I didn't know how I'd react. I'm not normally good."

The time trial was a good form guide for the world time trial championships even if the hilly 38.8km route was different from the flat 57.9km course in Tuscany.

The medals seem a three-way battle, with Bradley Wiggins also a contender. Jerome Coppel (Cofidis) made a claim for a place in the French team by finishing eighth and 1:52 down on Cancellara.

Marco Pinotti (BMC) was no doubt disappointed with his ride after finishing 3:14 behind, but Italian rival Dario Cataldo (Team Sky) performed much better, finishing just 1:41 behind Cancellara.

The Vuelta a Espana returns to road racing on Thursday with the 164.2km 12th stage from Maella from to Tarragona.

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