Blake is playing in the Masters Cup for the first time

The American number eight seed, making his Masters debut, won 6-4 7-6 to extend his winning record over Nadal.

The loss continues a dismal run for Nadal, who has not won a title since completing back-to-back French Open victories in May this year.

Russia's number three seed Nikolay Davydenko beat Spain's Tommy Robredo, the number six seed, 7-6 3-6 6-1.

Blake, 26, recovered from a break down in the first set but slipped to 0-4 in the second before rallying, breaking Nadal three times to force the tie-break.

He then won every point in the tie-break as Nadal crumbled.

606 DEBATE: Your reaction to Blake's win

Blake said: "I'm the guy that's supposed to be the easy match in this tournament, which doesn't help my confidence much.

"You don't beat Nadal by playing conservatively but I don't have any specific advice for any other players how to beat Nadal.

"I've been lucky enough to play him all three times on hard courts, which is definitely in my favour more so than if I were to play him at the French Open."

Nadal said he was not far from his best during the match, but did not play many of the big points with conviction.

"James played very good points, very aggressive points in the decisive moments, important moments," said Nadal.

"The problem is not the tennis. The problem is confidence. Win one of the matches, all changes, no? So I hope I win the next on Wednesday."

The victory gives Blake every chance of reaching the semi-finals as one of the top two in the Gold Group.

In Red Group matches on Sunday, Roger Federer beat defending champion David Nalbandian while Andy Roddick saw off Ivan Ljubicic.

Red Group: Roger Federer (Swi), Ivan Ljubicic (Cro), Andy Roddick (USA), David Nalbandian (Arg)

Gold Group: Rafael Nadal (Spa), Nikolay Davydenko (Rus), Tommy Robredo (Spa), James Blake (USA)