The Toyota driver started the day with a 0.7s lead over Tanak after claiming two stages wins on Friday, but a crash on Stage 10 ended his victory hopes.
Lappi was running strongly on his return to the WRC this weekend after vacating the third GR Yaris for Sebastien Ogier at Rally Portugal two weeks ago.
However, the Finn’s rally unravelled on the Saturday morning when he hit a compression that pushed the car into a rock face. A series of impacts followed as the car pinballed down a section of narrow gravel road.
The impact ripped the left-rear wheel and suspension from the car before coming to a halt on the edge of the road.
Both Lappi and co-driver Janne Ferm inspected the damage but the impact to the left rear of the car was too significant.
Tanak has now moved into a relatively healthy 31.8s lead after winning Stage 10 and the test that followed.
Tanak’s i20 N showed no signs of the transmission issue that struck on Friday afternoon, before organisers cancelled the final two stages of the day due to an incident involving a WRC2 competitor.
M-Sport’s Craig Breen has now climbed to second overall but the Irishman was only 1.5s ahead of Hyundai’s Dani Sordo.
The pair both leapfrogged M-Sport’s Pierre-Louis Loubet, who suffered a front-right tyre come off the rim towards the end of Stage 10 and an overshoot in Stage 11.
Championship leader Kalle Rovanpera continued to struggle on the loose gravel roads, but did climb ahead of team-mate Takamoto Katsuta into sixth, behind M-Sport’s Adrien Fourmaux.
Hyundai’s Thierry Neuville enjoyed a strong start to the morning, posting times good enough for third and second on the opening pair of stages.
The Belgian could have been quicker in Stage 10 had he not stopped to avoid a dog that had found its way onto the road.
“I had a good stage," said Neuville who sat eighth overall. "But in the first kilometre there was a dog in the road so I had to slow down and turn around so I lost a couple of seconds there but at least I saved the dog.”
Crews are scheduled to complete eight stages today without a midday service.
