Andy Murray battled for three hours and 11 minutes but lost Rafael Nadal,then declared: "That's the reason I play tennis."

It was an epic match in every sense, with the momentum shifting one way and then the other before the world number one finally took his third match point to triumph 7-6 (7/5) 3-6 7-6 (8/6).

Murray has been accused in the past of not rising to the challenge when the stakes are highest but this was not one of those occasions as the 23-year-old gave one of the performances of his life in front of a home crowd at London's O2 Arena.

The Scot won five more points and, in the second and third sets in particular, was marginally the better player, but opponents do not come tougher than Nadal, who will meet either Roger Federer in Sunday's final.

Murray's only moment of regret was a poor game at the start of the third set that gave Nadal his only break of the match and put the Spaniard back in the ascendancy after a run where he had lost five games in a row.

The fifth seed said: "It was a great match. I think both of us played very well. I probably played one bad game the whole match, or maybe just a couple of bad points."

If Murray was going to lose to anyone, you sensed the only consolation was that it was Nadal. The two have always had a warm relationship, whereas the Scot's meetings with Roger Federer have had a much harder edge.

"I just love playing against him," said Murray, who hugged his rival across the net at the end. "As a sportsman, I don't know if there's been many better than him ever in terms of the way he conducts himself.

"His whole team that he works with is incredibly nice. I have a lot of respect for him.

"I've had many great matches with him. I've lost some of them, I've been lucky enough to win some. Hopefully I'll get more chances to play him in these sort of matches because today is the reason why I play tennis."

It was by far the best tennis match the O2 has seen, and must rank as one of the best three-setters of this or any other year.

The first set was incredibly close, with Nadal edging it courtesy of a fine volley on set point. Murray wobbled at the start of the second but dug deep to save two break points.

The 23-year-old gradually gained the ascendancy and finally broke through, at the fourth time of asking, to lead 4-3. A second break helped him swiftly wrap up the set but, having won five games in a row, Murray let Nadal off the hook.

Two poor drop shots helped the Spaniard break, but this was far from over and, after saving a match point, Murray came up with a stunning backhand pass to level at 5-5.

A second tie-break duly arrived and, although the fifth seed made the better start, Nadal hit back and clinched victory with a trademark forehand winner.

Murray added: "I kind of knew when I was out there that it was a great match. The noise the crowd made when we changed ends at 6-6 (in the final tie-break) was pretty incredible.

"It's nice in some ways to be involved in matches like that. But it's not nice losing them."

Nadal, who will play in his first final at the end-of-season showpiece, admitted the change in fortunes at the start of the third set was a crucial moment.

The Spaniard said: "Today I played one of the finest matches of my career. Being in the final is a dream.

"I think it was an incredible tennis match. I was a little bit lucky at the beginning of the third. He had two mistakes, very important mistakes for me in those moments because I was a little bit tired. After that I started to play my tennis again."