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Cancellara retained the race leader's yellow jersey with an 18sec lead on Spanish race favourite Alberto Contador of Astana ahead of another potential bunch sprint finish on stage three.

The 24-year-old Cavendish won an impressive four stages at last year's edition and has since added a number of big victories to his growing list, including the Milan-San Remo one-day classic in March.

And he got this year's Tour campaign off to a perfect start after his Columbia-htc team had played a leading role in chasing down an ultimately futile four-man breakaway.

However, the Isle of Man rider did well to stay out of trouble during a dramatic finish.

A right hand bend just under two kilometres to go caused confusion in the peloton. While a few riders crashed, others accidentally wandered to the left off the official race route.

Cavendish said he then took a hit from a Skil-Shimano rider, an incident he said he will be following up on later.

American George Hincapie, Cavendish's teammate at Columbia, then peeled off with 800 metres to go, leaving Australian Mark Renshaw to lead Cavendish towards the line where he finished off the job alone.

American Tyler Farrar came in second, an impressive result on his Tour de France debut, but in the end the Garmin rider's top end speed was no match for the 'Manx Express'.

"It's beautiful to be wearing the green jersey - it's a big objective for any sprinter so of course it's emotional for me," said Cavendish, whose main aim remains reaching Paris, preferably with a few more stage wins.

"It's a step in the right direction and it's a beautiful moment for me."

A four-man breakaway had escaped the peloton early in the stage which took the bunch away from glitzy Monaco into the Var region, which baked in temperatures reaching 40 degrees.

"We just had to focus on drinking as much as possble," said Cancellara, one of the many riders who complained of the heat.

"With 30/40km to go I was pouring water on my head to cool myself down. And I've got a few kilos more than some of the other riders, so it's harder for me."

Finland's Jussi Veikkanen, Dutchman Stef Clement and French duo Stephane Auge and Cyril Dessel worked well together for the first 100km and managed to build a maximum lead of five minutes.

But after Cancellara's team had helped reduce the advantage slightly Columbia's efforts dropped their lead significantly and they were eventually reeled in with less than 10km to race.

That set the stage for Cavendish to seize the final initiative and burst for the line.

But the former track champion admitted he had to control his temper when he got assaulted by one rival.

"One of the Skil riders took his hands off the handlebars and actually hit me. That's a dangerous thing to do to hit a contender for the sprint and I will be finding out later what it was all about," added Cavendish.

Skil team spokesman Bennie Ceulen later explained, however: "It was one of our riders, Piet Rooijakkiers, who hit Mark but it wasn't deliberate.

"Piet was barged into Cavendish's sprint train by French rider Lloyd Mondory and he lost his balance."

Cavendish meanwhile showed once again that on the stages likely to finish in bunch sprints his Columbia-htc team just don't have time for what's going on with their rivals.

"My team's job is to get me into the best possible position," he added.

"If you think about other riders, then it's taking your focus away."