As the most successful driver in Formula One history celebrated a 90th career win, he slashed world champion Fernando Alonso's overall lead from 12 to two points with just three races remaining.

Ferrari's Formula One driver Michael Schumacher of Germany (R) sprays champagne on the podium after winning the Italian Grand Prix as McLaren's Kimi Raikkonen of Finland looks on at the Monza race track in northern Italy September 10, 2006. Schumacher, the most successful Formula One driver of all time, announced on Sunday that he was retiring from the sport at the end of the season. [Reuters]

The Renault driver, controversially relegated five places on the starting grid for impeding Schumacher's team mate Felipe Massa in qualifying, pulled over with a blown engine 10 laps from the end while in third place.

Ferrari took a three-point lead over champions Renault in the constructors' standings.

Yet what happened on the track was entirely overshadowed by what followed the chequered flag, with the seven-times champion confirming that he would retire from racing at the end of the season next month.

Stepping from the red machine that has already powered him to six victories this season, Schumacher embraced his jubilant team mates starting with Ferrari president Luca di Montezemolo.

"At the end of this year, I've decided together with the team that I'm going to retire from racing," the driver told a later news conference.

"All these years in Formula One have been amazing, especially those spent alongside my friends in the Scuderia (Ferrari)."

"Soon my future will belong to my family, while I am happy to be still part of Ferrari. But for now, what matters is this world championship," said the German.

RAIKKONEN SECOND

Kimi Raikkonen, the McLaren driver who followed the 37-year-old Schumacher across the line in second place and had the fastest lap after starting from pole position, will step into the shoes of the departing great.

"I was really pleased to hear that he would be the person," said Schumacher.

The Finn had led the race until the first pitstop, when Schumacher stayed out for one more lap and took over, running untroubled to victory in the Monza sunshine.

Poland's Robert Kubica finished an impressive third for BMW Sauber in only his third grand prix since replacing former champion Jacques Villeneuve. He also led for five laps.

"Before the race, some guys from the team came to me and told me they would like to see me on the podium," said the 21-year-old. "I thought it was a joke and now we are here."

While Schumacher's chances of an unprecedented eighth title burned stronger than ever, Alonso's day ended in smoke and flames.

"There is not too much to say on a day like this," said Alonso. "When you start from 10th, you have to push everything to the limit -- yourself, the car, the tyres and the engine.

"I was going to easily finish on the podium today and we showed that, without the penalty, the car had the pace to fight for the victory."

Team mate Giancarlo Fisichella limited the damage to Renault in the constructors' standings with fourth place, ahead of the Hondas of Briton Jenson Button and Brazilian Rubens Barrichello.

Italian Jarno Trulli was seventh for Toyota and Germany's Nick Heidfeld collected the final point for BMW Sauber after a drive-through penalty.

Massa, winner of the last race in Turkey and partner to Raikkonen next year, finished ninth after running off the track following Alonso's engine failure.

Former champions Williams had another bleak afternoon, failing to score a point for the 10th race in a row -- their worst run of failure since the 1970s.