We report on the detection of Ne viii in an intervening multiphase absorption line system at z = 0.32566 in the FUSE spectrum of the quasar 3C 263 ( z _ { em } = 0.646 ) . The Ne viii \lambda 770 Å detection has a 3.9 \sigma significance . At the same velocity we also find absorption lines from C iv , O iii , O iv and N iv . The line parameter measurements yield log [ N ( { \hbox { { Ne~ { } } \kern 1.0 pt { \sc viii } } } ) ~ { } { \hbox { cm$ { } ^ { -2 } $ } } ] = 13.98 ^ { +0 % .10 } _ { -0.13 } and b = 49.8 ~ { } \pm~ { } 5.5 km s ^ { -1 } . We find that the ionization mechanism in the gas phase giving rise to the Ne viii absorption is inconsistent with photoionization . The absorber has a multi-phase structure , with the intermediate ions produced in cool photoionized gas and the Ne viii most likely in a warm collisionally ionized medium in the temperature range ( 0.5 - 1.0 ) \times 10 ^ { 6 } K. This is the second ever detection of an intervening Ne viii absorption system . Its properties resemble the previous Ne viii absorber reported by Savage et al . ( 2005 ) . Direct observations of H i and O vi are needed to better constrain the physical conditions in the collisionally ionized gas phase of this absorber .