Spaniard Juan Miguel Mercado pips Frenchman Cyril Dessel in a sprint finish to take the stage victory in the first mountain stage in the Pyrenees.
The pair took the lead on the monstrous Col de Soudet climb and although they were caught, they went ahead again as they ascended Col de Marie-Blanque.
Inigo Landaluze came in a minute adrift with the peloton seven minutes back.
Dessel's consolation is that he takes over the yellow jersey and the polka dot jersey for the best climber.
The 190.5km stage took the riders from Cambo-les-Bains to Pau.
LATEST UPDATES (all times BST):
1625: The head of the peloton comes in more than seven minutes adrift of the leaders.
1. Juan Miguel Mercado (Spa/AGR) four hours 49 mins 10 secs
2. Cedric Dessel (Fra/AG2R) same time
3. Inigo Landaluze (Spa/EUS) at 56 secs
1618: With 300m left, Dessel makes his move...but Mercado bides his time to take the stage victory by half a wheel length.
1615: With 2km to go, it is cat and mouse between Dessel and Mercado at the front, with Mercado sitting on the wheel of Dessel. Mercado has won a previous stage of the Tour in 2003, when he was a member of the Quickstep team.
1605: Dessel and Mercado are just 10km away from the finish in Pau. Dessel is destined to take the yellow jersey. He began the day in 28th place, 3:50 behind current leader Serhiy Honchar, who is in the peloton more than nine minutes back. Mercado was 66th after nine stages, 6:32 behind Honchar.
1600: Landaluze, back in third, is now 40 seconds adrift of the leading duo, with 15km left.
1555: Victory in the stage now looks to be a straight fight between Dessel and Mercado. Dessel could make it a day of celebration for France by taking over the yellow jersey. The peloton is still 9:35 adrift.
1545: Inigo Landaluze appeared to be on the verge of catching the two leaders with 25km to go, but seems to have paid for his extra efforts as the gap grows again.
1525: The last climb of the day is worth double points and Dessel shines again, taking 30 points. A superb performance and he now takes the polka dot jersey from Jerome Pineau.
Result of Col de Marie-Blanque climb:
1. Dessel (A2R) 30pts
2. Mercado (AGR)
3. Landaluze (EUS) at 25"
4. Rinero (SDV) 1'05"
5. Moreni (COF) 1'05"
6. Isasi (EUS) at 2'25"
7. Vasseur (QSI) 2'25"
1512: Dessel and Mercado attack with 46km to go and leave the rest in their wake. As the pair battle with the slope, a fan with an inflatable Wallaby on his head runs alongside them.
1505: It is all quite calm really as the competitors start the Col de Marie-Blanque. It is a shame that the riders can't enjoy the wonderful view.
1502: Voigt, Posthuma and Quinziato are swallowed up by the peloton, which despite the pace-setting by the T-Mobile team, is over 10 minutes behind the leading group.
1447: Vasseur and Moreni put an impressive sprint on at the 130km mark and join the leaders. The riders have just started to regain their breath but they know that a first category climb up the Col de Marie-Blanque lies ahead.
The start of the climb has a gradient over 10% so expect yet more changes out front.
1439: Just a quick reminder of the state of play: the five leaders head Cedric Vasseur and Cristian Moreni by 36 seconds, with Matthieu Sprick over three minutes further back.
1434: The leaders reach the feeding station at 123km and gratefully receive their goodies. Mercado almost misses out as he drops one bag but don't worry - he gets another later on.
1430: Dessel legally holds on to a support car as he has running repairs on his bike. A brave mechanic leans out of the fast moving vehicle and somehow completes the work without injury to himself or Dessel. Landaluze's Euskal Tel team-mate Inaki Isasi joins the leaders.
1422: The riders are now over the other side and are flying down the hill and the lower they get, the better the visibility. It is as you were at the front, with Rinero and Landaluze rejoining the lead.
1414: Meanwhile, the peloton is still making the arduous journey up the mountain. They are almost nine and a half minutes behind the leading pair, who are back together again.
1410: In foggy conditions, and with numerous fans spilling onto the road, Dessel drops Mercado to take the first climb of the day. The long winding descent now begins but the fog could make this quite dangerous.
Result of Col de Soudet climb:
1. Dessel (A2R) 20pts
2. Mercado (AGR) 18 pts - at 5"
3. Landaluze (EUS) 16pts - at 30"
4. Rinero (SDV) 14pts - at 50"
5. Isasi (EUS) 12pts - at 1'15"
6. Vasseur (QSI) 10pts - at 2'20"
7. Moreni (COF) 8ppts - at 2'20"
1356:There are just four km to go of this hellish climb and Mercado and Dessell have left the rest behind.
With their legs and lungs burning up the last thing they need is some wag with his shorts down splashing them with water. The gentleman concerned finds it funny though and he flashes a nice smile to the cameras.
1348: The leaders thin out yet again. Cyril Dessel, Christophe Rinero, Inigo Landaluze and Juan Miguel Mercado are the only ones left at the front now - nine minutes ahead of the rest.
Meanwhile Euskal Tel's star rider Iban Mayo is almost at a standstill as he desperately tries to get up bike up the mountain. Hushovd is also struggling and has been dropped by the peloton completely. Is the humid weather having an effect?
1345: Make no mistake about it, mountain climbing is brutal. The ascent up Col de Soudet is 15km (nine miles) in length and has an average gradient of 7.3%.
1338: The climb is starting to take its toll on the leaders. Posthuma, Quinziato, Voigt and Da Cruz either cannot keep up or decide they have had enough. Either way, they drop out, leaving nine riders out in front.
1333: A brief moment of worry for Calzati as his chain comes off. The Frenchman quickly repairs it and hops back on to try and catch up with the peloton.
1330: With 86km gone, the brutal Hors Category climb up the Col de Soudet is well underway. The peloton, headed by a gang of pink-shirted T-Mobile riders, is now over nine minutes behind the fugitives.
1318: Spain's Xabier Zandio Echaide rejoins the race after taking a spill into the grass verge. He will probably have a few bumps and bruises and he ruefully shakes his head as he returns to his new bike.
1310: Italy's Daniele Bennati wins the day's second sprint at Laguinge while Jimmy Engouvent of the Credit Agricole team retires from the race with injury.
Result of second sprint:
1. Daniel Bennati (LAM) 6pts
2. Carlos Da Cruz (FDJ) 4pts
3. Jens Voigt (CSC) 2pts
1302: The leading riders, who now have a lead of over five minutes, are approaching the second sprint of the day at Laguinge.
1300: The gap between the leading group and the peloton is rising gradually and now stands over 4.30 minutes at 64km. The peloton seem content to allow the leading group to break away.
1248:The leading group now comprises of 13 riders as sprinters Thor Hushovd and Gert Steegmans fall back to the peloton and the gap is now over two minutes and growing slowly.
1240: The leading riders get over the top of the third category climb - the Col d'Osquich around one minute and 30 seconds ahead of the peloton.
Results of Col d'Osquich
1. Cyril Dessel (A2R) 4pts
2. Christophe Rinero (SDV)
3. Matthieu Sprick (BTL) 2pts
4. Mercado (AGR) 1pt
1223: After a brief lull where the field bunch up again, there is another breakaway at around 40km which this time looks to be more substantial. There are around 15 of them and at the moment no-one seems interested in catching up. The group, including Jens Voigt, Joost Posthuma, Gert Steegmans, Manuel Quinziato, Daniele Bennati and Thor Hushovd soon carve out a 55 second lead over the peloton.
1217: A well-timed charge from Carlos Da Cruz of FDJeux.com sees him take the first sprint of the day at 37km.
Result of first sprint:
1. Carlos Da Cruz (FDJ) 6pts/6"
2. Beat Zberg (GST) 4pts/4"
3.Manuel Quinziato (LIQ) 2pts/2"
1215: The start of this race shows how difficult it is to form a decisive breakaway. Flecha is caught by Chavanel and Switzerland's Beat Zberg before a host of others join them.
1211: Chavanel is still out in front at 30km and is desperately trying to see if anyone is going to join him. His work is done however and he slows down completely to let Spain's Juan Antonio Flecha of the Rabobank team to take over.
1204: Chavanel is starting to looking over his shoulder as he can see the chasing pack closing in with 25km gone.
1156: Stage eight winner Sylvain Calzati launches a counter attack but he is joined by a group of around 15 other riders. Chavanel is 10 seconds ahead now but it is difficult to keep the required pace up when you are on your own.
1152: Chavanel is out in front and leads the rest by 30 seconds with 16km gone. The peloton is starting to split up now as they weave their way through some lush green scenery. Some of the riders are standing up and the bikes are weaving from side to side as they negotiate the inclines - and the real climbs have really started yet.
1147: Frenchman Sylvain Chavanel of the Cofidis team makes the first meaningful charge. It is very early on and no-one goes with him - leaving him with just television motorbikes and supporting cars for company.
1140: There is another charge for the front, this time led by Fabian Wegmann, Unai Etxebarria, Rik Verbrugghe, Ruben Lobato and Michael Albasini. However, after just 8km gone, they are held to just a crawl as a group of Basque protestors block the road - allowing the peloton to catch up. All that effort for nothing.
1134: The break does not last long as 10 riders from the peloton reach the leaders.
1130: The flag drops and we are off and running. Immediately there is a four-man breakaway with Stuart O'Grady, Johan Van Summeren, Aitor Hernandez and Patrick Calcagni taking a 20-second lead.
One man who did not start the stage was Laurent Brochard of the Bouygues Telecom team, who has withdrawn with a leg injury.
1112: The tape goes up and the riders begin their leisurely 7.5km ride through the neutral zone. This is the last time they are going to be looking so comfortable in their seats for quite some time.
1105: Although there are cloudy skies, it is still warm at 24C in the air and 26C on the road. There is a possibility of some rain in the mountains.