The 26-year-old Englishman still recorded a 69 for a 13-under total of 203, with Sweden’s Peter Hanson his nearest challenger after a 68 and compatriot Henrik Stenson another shot back in third.

Stoke’s David Lynn was a further stroke adrift on seven under but Colin Montgomerie, seeking a fourth win in the event, bogeyed three of his last five holes in a 72 to finish four under.

Donald, who is based in Chicago after graduating from the city’s Northwestern University and plays primarily on the USPGA Tour, is currently outside the top 10 in the Ryder Cup world ranking list with only the top five to qualify automatically for the team to defend the trophy at Oakland Hills in September.

Even a win at Barseback would only move him up to 10th in the standings, but he is a genuine contender for one of the two wild cards available to captain Bernhard Langer given his experience of playing in America and brilliant Walker Cup record – he won seven of his eight matches in Britain and Ireland’s victories in 1999 and 2001.

“It’s nice to be leading after three days but winning means a lot more,” said Donald, who holed a six iron from 198 yards on the 13th before dropping his first shot in 47 holes on the 17th and bogeying the last.

“The way I have played is going to keep Bernhard’s attention but I still have one round to go and I have to finish the job off tomorrow.

“It would be very special to win in Europe. The European Tour is growing every year, this is a great event with a good field and it would mean a lot to me at this stage of my career to notch a win.”

Donald, who was denied a second US Tour victory by an inspired John Daly in a play-off for the Buick Invitational earlier this season, added: “Obviously it’s a disappointing finish, I had the ball on a string for the first 13 holes but three bad drives cost me.

“But I’m not going to think about that, I’m going to think about the positives. I shot three under and lead by three and if I keep playing the way I have been it’s going to be difficult to catch me.”

Donald's chances of claiming a wild card were also boosted by the poor displays by some of his possible rivals today.

Ireland’s Paul McGinley, who holed the winning putt at The Belfry in 2002, started the day in third place but could only manage a 74, the same score as Ian Poulter, who currently occupies the last automatic qualifying place.

The man next in line, France’s Jean-Francois Remesy, had already missed the cut along with Sweden’s Fredrik Jacobson and England’s Barry Lane.

Montgomerie, favourite for one of the two wild cards but still hopeful of qualifying automatically, had given himself an outside chance of victory with four birdies in the last five holes of his second round 68.

But after going to the turn in 35 and picking up shots at the 11th and 12th today, the 41-year-old bogeyed three holes in a row from the 14th to drop out of contention.

Nick Faldo also bogeyed the 17th for a 69 for a four-under total, but the 47-year-old was still happy with his efforts.

Long-time caddy Fanny Sunesson was given the day off to attend her brother’s wedding and Faldo added: “It worked out well. I need to do more on the golf course, I have a tendency to fall asleep so it was good to have to concentrate and do my own yardages.”

The six-time major winner still harbours faint hopes of adding to his record total of 11 Ryder Cup appearances but admitted he would have to win the USPGA championship in a fortnight’s time to have a chance.

Collated scores and totals in third round of Scandinavian Masters, Barseback Golf and Country Club, Malmo (Gbr & Irl unless stated, Par 72)

(x) denotes amateurs

203 Luke Donald 69 65 69

206 Peter Hanson (Swe) 72 66 68

208 Henrik Stenson (Swe) 68 70 70

209 David Lynn 72 68 69

210 Steven O’Hara 72 71 67, Steve Webster 68 74 78, Jesper Parnevik (Swe) 69 70 71, Wilhelm Schauman (Swe) 68 67 75

211 Robert Coles 71 71 69, Charl Schwartzel (Rsa) 73 69 69, Carlos Rodiles (Spa) 71 69 71, Simon Khan 70 69 72, Christopher Hanell (Swe) 68 69 74, Paul McGinley 69 68 74

212 Stephen Scahill (Nzl) 72 73 67, Raymond Russell 72 72 68, Jean-Francois Lucquin (Fra) 70 73 69, Nick Faldo 71 72 69, Ross Fisher 71 71 70, Peter Fowler (Aus) 73 69 70, Niclas Fasth (Swe) 71 71 70, Markus Brier (Aut) 70 71 71, Colin Montgomerie 72 68 72, Thomas Levet (Fra) 69 71 72, David Howell 67 71 74

213 Iain Pyman 75 70 68, Jorge Berendt (Arg) 75 68 70, Adam Scott 72 71 70, Simon Wakefield 72 70 71, Soren Hansen (Den) 69 71 73, Johan Edfors (Swe) 67 71 75

214 Greg Owen 71 75 68, Marcel Siem (Ger) 71 74 69, Robert Karlsson (Swe) 75 70 69, Damien McGrane 72 72 70, Graeme McDowell 70 74 70, Jesus Maria Arruti (Spa) 70 72 72, Raphael Jacquelin (Fra) 72 70 72, Pierre Fulke (Swe) 71 70 73, Peter Hedblom (Swe) 71 70 73, Soren Kjeldsen (Den) 73 67 74, Ian Poulter 72 68 74

215 Sven Struver (Ger) 73 73 69, Ian Woosnam 72 73 70

216 Jamie Spence 74 72 70, Mark Roe 74 70 72, Sebastian Fernandez (Arg) 69 74 73, Stephen Dodd 71 72 73, Andrew Coltart 70 72 74

217 Johan Skold 77 69 71, Jose Manuel Lara (Spa) 76 70 71, Scott Drummond 74 71 72

218 Peter Lawrie 72 74 72, Mark Foster 74 71 73, Miguel Angel Martin (Spa) 70 74 74, Chris Gane 68 73 77

219 Fernando Roca (Spa) 71 75 73, Henrik Nystrom (Swe) 73 73 73, Peter Gustafsson (Swe) 72 73 74, Richard Green (Aus) 74 71 74, Johan Axgren (Swe) 72 72 75, Matthew Blackey 72 72 75, Costantino Rocca (Ita) 71 72 76

221 Wade Ormsby (Aus) 76 70 75, Philippe Lima (Fra) 76 69 76, Tony Johnstone (Zim) 73 72 76, Peter Baker 74 71 76, Gregory Havret (Fra) 70 74 77

222 Rolf Muntz (Ned) 72 74 76, Paul Broadhurst 72 73 77, Nick O’Hern (Aus) 73 69 80

223 Martin Erlandsson (Swe) 73 72 78

224 Andrew Oldcorn 72 74 78