(CNN) -- Second seed Rafael Nadal crashed out of contention at the ATP World Tour Finals after a 6-1 7-6 (7-4) defeat by Nikolay Davydenko at the O2 Arena in London.
The world number two cannot qualify for the semifinals of the season-ending event even if he beats in-form Novak Djokovic on Friday as his second successive straight-sets reverse means he cannot claim second place on countback.
The result meant that Sweden's Robin Soderling -- a late replacement for the injured Andy Roddick -- has qualified for the last four following his victory over defending champion Djokovic earlier on Wednesday.
"To be out of the [Finals], well, that's sport and everything can happen," Nadal, who lost his opening match 6-4 6-4 to Soderling, told the ATP Tour's official Web site.
"I didn't arrive to this tournament with the full confidence that you need to win these matches. And in the moments that I had to play well, I didn't play well. I made mistakes.
"I fought a lot. Both matches I fought. I tried my best all the time, but it wasn't enough to win these matches."
Nadal will now turn his sights to the Davis Cup final against the Czech Republic, to be played on home clay in Barcelona next weekend.
Davydenko, however, will seek to emulate last year's performance in reaching the final, where he lost to Djokovic when the tournament was held in Shanghai.
The Russian blew away Nadal in the opening set and led 4-2 in the second before being his opponent rallied, then took out the tie-break for his first victory of the tournament after his opening loss to Djokovic.
"It was an important tie-break," Davydenko said. "Tie-break for me, it's really important. I concentrated 100 percent. I tried to win. Almost every tie-break in last few months I have won. Again, I realize my tie-break today and I won."
"Just winning one match, now I am 1-1. Still maybe there is a chance, maybe not, to come to the semifinal. But after the first match, I showed my good tennis in the second match. We'll see if I can show the same tennis in the third match."
Davydenko has a decent record against Nadal, having beaten him three times in their previous seven matches, most recently in the final of the Shanghai Masters last month.
And he began superbly, setting up a break-point in the second game with a backhand winner then taking his opportunity when a lengthy rally ended with Nadal finding the top of the net.
The Spaniard, unusually, did not even attempt to chase down a number of balls and his record in the competition slumped to three sets lost and none won after less than half an hour as Davydenko secured a second break to love before easily serving it out.
Nadal looked a shadow of the player who dominated the first five months of the season and he was immediately in trouble at the start of the second set.
The Spaniard saved a break-point thanks to a big serve and went on to hold but Davydenko must have been scarcely able to believe how many half-court balls his opponent was presenting him with.
Nadal doggedly hung on in the third game but the pressure finally told two games later, Davydenko taking his third break point to move into a 3-2 lead.
The seventh seed then gave Nadal an unexpected lifeline as he slipped to 15-40 but the 23-year-old could not take advantage.
Nadal has reached the semifinals on both his previous appearances at the end-of-season tournament and he at last began to take the fight to his opponent, pumping his fist in celebration as a Davydenko backhand dropped long on break point.
A three-game winning streak for Nadal took him to 5-4 but the Russian stopped the rot and another feeble game from the Spaniard left Davydenko serving for the match.
An engrossing second set had another surprise in store, though, as a series of vintage Nadal shots allowed him to break back again.
A tie-break of phenomenal quality ensued, but it was Davydenko who came through thanks to the last of many winners in a match lasting one hour and 47 minutes.