Yachting: Wild Oats XI grinding down leader's margin

Wild Oats XI is one of the fastest of the fleet of 92 heading to Hobart. Photo / AP

Wild Oats XI has fought back against new rival and fleet leader Perpetual LOYAL as she faces one of the greatest challenges to her long dominance in the Sydney to Hobart yacht race.

Perpetual LOYAL established a 10 nautical mile lead over six-time line honours winner Wild Oats XI in light wind conditions. But Wild Oats XI made steady inroads into that gap, closing within three miles of the front runner which was 44 nautical miles south east of Gabo Island off the Victorian coast.

Skipper Mark Richards and his crew were managing around 13 knots, making Wild Oats XI one of the fastest of the fleet of 92 which remained intact since the early retirements of Audi Sunshine Coast and Dodo on Thursday afternoon.

A grand battle for third was developing around 20 miles further back as they headed south.

New Zealand Volvo 70 Giacomo held that position for much of the morning, but supermaxi Ragamuffin 100 sneaked ahead of her.

Wild Oats XI, Perpetual LOYAL and Giacomo were also leading the way in a fluctuating battle for handicap honours.

Owner Bob Oatley's Wild Oats XI is trying to equal Morna/Kurrewa IV's race record of seven line honours wins. In her eight years of racing, Wild Oats XI has been beaten to Hobart by just two boats. Her run of four straight wins was ended in 2009 by Alfa Romeo.

She was also trumped in 2011 by Investec LOYAL, the previous boat of Anthony Bell, the skipper-owner of Perpetual LOYAL.

With light and shifting winds persisting, the tactical brains trust on each boat was being kept busy looking for any extra breeze.

"This is the amazing thing about this race so far, tiny differences in tactics and positions have led to significant gains and losses," said Olly Cotterell, skipper of OneDLL, one of the 12 Clipper Round the World boats competing in the race.

Vicki Ellis, skipper of Switzerland, another of the Clipper contingent, was also developing respect for the race. "It's a big challenge," she said.

- AAP