The 38-year-old Spaniard, a 22-time Grand Slam winner, was defeated in the first singles rubber and after Carlos Alcaraz won the second match to send the tie to a doubles decider, the Dutch triumphed to snatch a 2-1 win.

Nadal was beaten 6-4, 6-4 by Botic van de Zandschulp in the opening singles clash, before Alcaraz defeated Tallon Griekspoor 7-6 (7/0), 6-3.

In the deciding doubles rubber, Van de Zandschulp and Wesley Koolhof secured a 7-6 (7/4), 7-6 (7/3) victory to set up a semi-final clash with Canada or Germany.

After years ravaged by injuries and not having played an official singles match since July, doubts hung over Nadal's involvement in the tie.

They were resolved when captain David Ferrer confirmed he would play in the first singles rubber of the opening finals clash.

Nadal appeared emotional during the Spanish national anthem, and over 10,000 fans filled the arena with chants of "Rafa, Rafa," when it ended.

"I was having an emotional day, nerves before what could be my last singles match as a professional," said Nadal.

"The emotions hearing the national anthem for the last time as a professional were very special."

Nadal had won his last 29 Davis Cup singles matches out of 30 played -- after debuting in the tournament in 2004.

Despite giving every ounce of his energy in the second set and buoyed by immense home support, Nadal fell short.

"In the beginning I think we were both nervous... the crowd was tough, understandably," said Van de Zandschulp.

"That is what it is to play against Rafa in Spain -- he is probably the biggest sportsman here in Spain that ever lived."

Given his diminished physical condition Nadal, ranked 154th in the world, attempted to keep points short, with big serves and occasional flashes of his lethal forehand, followed by a classic fist pump and roar.

World number 80 Van de Zandschulp sought to put Nadal on his backhand and the indoor hard-court tournament was far from an ideal surface for the record 14-time Roland Garros winning 'King of Clay'.

The Dutchman opened up two break points at 4-4 and took the second with a fine cross-court winner to claim the lead, and then converted his second set point to dampen Spanish spirits.

'All I had'

Nadal fought back from 0-30 down at the start of the second set but could not convert it into a hold and his opponent secured the first break when the Spaniard went long, consolidating to ramp up the pressure.

Down a set and a break, Nadal, hunting for a foothold, survived heavy pressure on his serve in the third game for a nervy hold that led to the loudest roar of the night.

Van de Zandschulp broke for a second time to take a 4-1 lead but Nadal showed his never-say-die spirit by claiming a break back in the sixth game.

He consolidated, surviving a break point to claim back-to-back games for the first time, as he gave everything in what could prove his final match.

However in the 10th and final game Nadal went long to concede match point and then hit a shot into the net to hand his Dutch opponent victory.

"I'm not in the rhythm of competition," admitted Nadal.

"I've been self-critical enough with myself to improve, even when I've won -- today I will not be tough on myself, this was all I had."

Alcaraz kept Nadal's dream of a final Davis Cup win alive with a strong performance in the second rubber.

"I did it for Rafa," admitted the world number three after winning his singles match to force a doubles decider.

Alcaraz won all seven points in a first set tie-break which ended Griekspoor's resistance.

The world number 40 was unable to put pressure on Alcaraz's serve and the Spaniard sealed the straight sets win to love in the ninth game.

He and Granollers came unstuck in the first set of the doubles with 35-year-old Koolhof, also retiring after the Davis Cup, in fine fettle at the net.

Spain took their third break point for a 2-1 lead in the second set to wrestle back in, but the Dutch got back on serve at 4-4 with a Van de Zandschulp cross-court winner.

Another tie-break ensued and the Dutch edged it again to bring the curtain down on Nadal's career.