Andy Murray knocked Roger Federer out of the Masters Cup in a dramatic match in Shanghai today to remain on course to earn $1million.

That prize is on offer to any player who remains unbeaten during the end-of-season tournament and the British No1 has won all three group matches following his 4-6, 7-6, 7-5 victory over Federer.

It is the first time the world No2 from Switzerland, winner of this event in four of the last five years, has failed to reach the semi-finals.

Murray, who has now beaten Federer three times this year, said: “That was awesome, to beat Federer when he needed to win to stay in the competition shows that I am mentally tough. I am going to feel a bit tired tomorrow but Roger Federer is the best player of all time and to beat him does not get any better.”

Murray clinched his place in the semi-finals, where he will meet Nikolay Davydenko tomorrow, on his eighth match point after three thrilling hours. The Scot has won three and lost three of the six meetings between himself and Russian Davydenko.

Murray added: “I am not worried about playing Davydenko. He is a strong player and it will be tough.”

Murray's win means Frenchman Gilles Simon has also made it into the semi-finals on his debut appearance, where he will face Novak Djokovic.

Simon, 23, was handed a place in the eight-man end-of-season event when world No1 Rafael Nadal withdrew.

Having beaten Federer and then lost to Murray in his previous red group matches, he today swept aside another late replacement, Radek Stepanek, 6-1, 6-4.

Stepanek, ranked No27 in the world, was called up when American Andy Roddick pulled out on Wednesday. Despite having to interupt a holiday in Thailand and arriving without his rackets or contact lenses, the 29-year-old Czech gave Federer a decent run for his money. But today, with nothing to play for, he surrendered against Simon in little more than an hour.