MADRID: Rafael Nadal lost to Spanish countryman Fernando Verdasco for the first time in the Madrid Open yesterday, then threatened not to return if the new blue clay-court wasn't discarded.

Nadal blew a 4-1 lead in the third set in losing 6-3, 3-6, 7-5, his first defeat to Verdasco in 14 matches.

The third-round loss was Nadal's earliest exit in a clay-court tournament since he fell to Olivier Mutis in the second round in Palermo, Italy, in 2004.

Roger Federer, meanwhile, dispensed with Richard Gasquet 6-3, 6-2 to advance to the quarter-finals.

The 16-time Grand Slam champion will face David Ferrer in the quarterfinals.

Meanwhile, top seed and defending champion Novak Djokovic defeated Stanislas Wawrinka 7-6 (5), 6-4.

Nadal blamed his first loss on clay in almost a year on the blue clay, which players have said was slippery, and sent an ultimatum to organisers, threatening to strike the tournament from his calendar if the traditional red surface was not restored.

Verdasco will play Tomas Berdych next after the Czech beat Gael Monfils 6-1, 6-1.

The fifth-seeded Ferrer saved three match points before smacking an unreachable forehand winner into the corner to seal his hard-fought 7-6 (5), 3-6, 7-6 (8) victory over fellow Spaniard Nicolas Almagro.

Also, Alexandr Dolgopolov of the Ukraine ousted fourth-seeded Jo-Wilfried Tsonga 7-5, 3-6, 7-6 (2), and will meet Juan Martin del Potro after the Argentine beat Marin Cilic of Croatia, 6-2, 6-4.

On the women's side, Serena Williams overcame a sluggish start to beat Caroline Wozniacki 1-6, 6-3, 6-2 and reach the quarter-finals.

Williams will play second-seeded Maria Sharapova after her Czech opponent Lucie Safarova withdrew before their match due to illness.

Fourth-seeded Agnieszka Radwanska of Poland knocked off Roberta Vinci 7-6 (1), 6-4 and will play Varvara Lepchenko of the United States after she beat Anabel Medina Garrigues 6-1, 6-7 (3), 6-3.