Andy Murray lost 4-6 4-6 to second seed Ivan Ljubicic in the Qatar Open final in Doha to end his hopes of starting 2007 with a second career ATP title.
Murray will see his world ranking improve despite the loss
The Scot had eight chances to break in the first set but it was the Croat who took advantage of a loss of focus by Murray to break in the 10th game.
Murray went a break up at 3-2 in the second but Ljubicic recovered and broke again to clinch a hard-fought victory.
Despite the loss, Murray goes to the Australian Open as a top 16 seed.
"Ivan is a great player and a great fighter and I lost to a
better player today," the 19-year-old said.
"It was freezing cold out here throughout the week but we
played some really good tennis. I am happy with the way I played for the most part and I look forward to continuing the good form in Australia."
Murray carved out six break points against a rusty Ljubicic in the very first game but the Croat hung on stubbornly to hold after nearly 15 minutes.
Murray is a tough opponent - I had to be aggressive but not
There were more chances for Murray to break in the seventh game, as Ljubicic lost concentration with a series of rash strokes, only to see the world number five cling on again.
It was the British number one who finally unravelled in the 10th game as Ljubicic tested him with some fierce forehands and took the opener with a brilliant passing shot.
The players continued to trade powerful strokes as the quality of the match stepped up in the second set, and it seemed as if neither would give ground.
Murray, scurrying and coughing his way around court, wore down Ljubicic in the fifth, forcing him into three errors to secure the break.
606 DEBATE: How will Murray fare in Australia?
But his advantage seemed to last as long as his patience as Murray's own mistimed shots gifted the second seed the break straight back.
The Scottish fourth seed tried to stave off Ljubicic's pressure for as long as he could, and as a result the duo produced some dazzling tennis.
The set was again decided in the 10th game and Murray saved three match points before an error saw him hand Ljubicic victory in Doha at his third attempt.
The 27-year-old will be the new number one when the first ATP tour race rankings of the year come out on Monday.
"It's a great feeling to come back and win here after being the runner-up in 2004 and 2005," Ljubicic said.
"The crowd has been fantastic and it's great to be the number one, although it may be for a short period.
"Murray is a tough opponent. I had to be aggressive but not
"I had to have a mix of baseline and net play. I just waited
for the points because he doesn't make too many mistakes."