The battle was now entering its critical stage.
On the Prussian right, 3rd corps had occupied the farm and were exchanging artillery fire with V corps. The farm was within short range of the French 12 pounder guns and the garrison was taking casualties.
VI corps now arrived and deployed alongside V corps. 3rd corps were strong enough to hold both V and VI corps, but they were too far back to protect the right flank of 1st corps.
1st corps had moved down from the hill and were exchanging skirmish fire with the left flank of XIII corps. Although only two brigades strong, they were also supported by artillery. The Prussians gradually gained the upper hand, and advanced into fire fight range of the French line.
This move exposed their right flank to the cuirassier brigade of V corps. The cavalry charged, and the infantry failed to form square in time. The result was the whole infantry brigade were cut down. The remaining Prussian infantry brigade formed square, which held the cavalry at bay. The Prussian artillery opened fire at short range on the French horsemen, who took heavy casualties and routed.
On the Prussian left 4th corps were closing with the right and centre of XIII corps. Their approach was slowed by the threat from the lancer brigade on their left flank. This was countered by the left hand Prussian brigade forming square, and the whole corps advanced in line with the square. As they did so the lancers were forced to fall back.
As 4th corps closed with XIII corps they exchanged skirmish fire. Again the Prussians gained the upper hand. They continued to advance into short range musket range and the Polish infantry were soon overpowered by the heavier numbers of Prussian infantry.
The first Prussian brigade to rout had a knock on effect along the whole line. All four infantry brigades were soon in rout, and eventually joined by the lancers. Only the gunners managed to keep their morale and withdrew with their guns. Davout managed to rally one infantry brigade, who covered the gunners as they retreated.
As night fell the whole of XIII corps was in rout down the Hanover road. Both V and VI corps held their ground, but faced with odds of more than two to one they retreated towards Celle as night fell.
Davout called a battlefield council of war with V and VI corps commanders. Laurison voted to retire to Celle and attempt to hold the town. Marmont was in favour of attacking Peine at first light. Davout was not prepared to fight a second day, particularly at odds of two to one against him. He had only agreed to fight at Peine at all because IV corps had promised to join him. Their failure to do so was another cause for concern, and he feared that they had been engaged by 2nd Prussian corps further to the north. He ordered a retreat to Celle, where he would rest and regroup V and VI corps and attempt to make contact with IV corps.
He was not aware that IV corps was just 15 miles to the west. As night fell they entered Brunswick, and by taking the town had cut Blucher’s communications with Magdeburg. The Prussian army prevented any direct communications between them and Davout, so Reynier would have to decide whether to risk an attack on Peine at first light, or take the safe option and retire north to join forces with Blucher at Celle.