Andy Murray must rediscover his serving power if the British hope is to survive beyond the group stage of the Barclays ATP World Tour Final at the O2 Arena in London.

Murray admitted he "served pants" on the way to a three-set defeat against Roger Federer, the Swiss tennis maestro who gained sufficient ranking points from their match to ensure he will finish the year as world number one for the fifth time in six seasons.

Perhaps a raucous, occasionally ill-mannered, sell-out crowd of 17,500 did not witness Federer at his imperious best last night. But the 28-year-old did enough on the way to a 3-6, 6-3, 6-1 win to suggest it will take somebody even more special to beat him to the title.

That somebody will not be Murray unless he wins, and wins well, against Spaniard Fernando Verdasco in their third and final Group A round robin tie tomorrow afternoon.

Murray, who overwhelmed Argentina's US Open champion Juan Martin del Potro on Sunday, has to repeat the trick against Verdasco just in case Del Potro causes an upset against Federer later in the evening. As it stands, the permutations as to who makes the semi-finals are endless. As far as Murray is concerned, it comes down to this: "If I win in straight sets against Verdasco, there is a great chance that I go through."

On paper, 22-year-old Murray will start as clear favourite against a 26-year-old opponent who has already lost this week against Federer and Del Potro. In their eight head-to-heads, Murray has triumphed over Verdasco seven times. But that serve has to improve if he is to add to that tally.

Against Federer, Murray conceded: "That was probably the most double faults - eight to Federer's one - I have served in a match this year. I served pants, I didn't play well. That happens sometimes.

"If you give someone the opportunity to dictate, not only on his service games but on yours, it's very difficult to win."

Federer's brand of fleet-footed athleticism earned just as much applause as Murray received simply for being British and playing in a British arena, although neither man deserved the frequent yells emanating from inconsiderate individuals just as they were about to serve.

Already a favourite on these shores even before he won his record-breaking 15th Grand Slam title at Wimbledon in the summer, Federer appreciated the backing he has received from packed houses this week.

He said: "When I left the court after the Murray match I was quite surprised to hear how happy the crowd was that I had won. The ovation I got was nice. But it was actually a night to celebrate being number one again, rather than celebrate a victory over Andy. Being top of the rankings was one of my big goals this season. And it's one of the greatest performances I've achieved, seeing what's happened off the court, getting married and having twin girls, and also reaching all four major finals.

"It means so much, especially after having a rough 2008 and then coming back this year, being able to dominate and play at the top when the depth in tennis is so great at the moment. It's a wonderful achievement."

In yesterday's other Group A match Del Potro kept his tournament challenge alive by outlasting Verdasco 6-4, 3-6, 7-6. Ahead of facing Federer, del Potro revealed he had been given a simple game plan by close friend and countryman Carlos Tevez, the Manchester City footballer.

"We spoke on the phone and Carlos told me I just had to win," said the tall 21-year-old. "He told me he may even try to come and watch me."

Tonight, in Group B, world number two Rafael Nadal of Spain must beat Russia's Nikolay Davydenko to have any real chance of making the last four.

The Spaniard, on Monday shocked in straight sets by Swede Robin Soderling who is only in the tournament as substitute for the injured Andy Roddick, could have his work cut out against an opponent who trounced him in straight sets just last month in the final of the Shanghai Masters.

Neither man looks strong. Nadal appears to have lost a lot of muscle, clearly to ease the weight and strain on his fragile knees, while Davydenko is concerned by a persistent breathing complaint that forced him to call for the doctor during his opening defeat to Serbia's defending champion Novak Djokovic.

"I've now seen doctors in three countries," he said. "Some doctors say maybe it is asthma, some say maybe an allergy, some say bronchitis. It's really become a problem."

For all that, the winner of four ATP Tour titles this year made Djokovic work for his win and is ready to stretch Nadal, too. He said: "I showed great tennis against Djokovic. I lost, but I gained confidence and I still have a chance here."