Finnish driver Harri Rovanpera has been released by Peugeot due to poor results and his "mental imbalance".
Rovanpera: Accused of "mental imbalance"
Rovanpera had recently signed a new contract with the French team for the 2004 season.
But Peugeot boss Corrado Provera told the World Rally website: "We have decided not to keep him anymore.
"He has not performed like we would have wanted. Since he crashed out of Finland he seems to have had a mental imbalance in his mind."
Rovanpera, whose sole win came in the Swedish rally in 2001, said he was shocked by the dismissal.
"I don't understand this," 37-year-old Rovanpera said.
"We had talks at the end of July and everything was okay - there was no problem.
"Now this - it looks like I have nothing. There is not very much time to find anything for next season."