LONDON (REUTERS) - Roger Federer lit up the O2 Arena with a dazzling 6-4 6-3 defeat of Novak Djokovic to hand the Serb an early ATP Finals exit and wreck his bid to end the year ranked number one.

In the 49th meeting between the two great rivals, Federer snapped a five-match losing run against Djokovic and gained some consolation for his heartbreaking Wimbledon final defeat.

After both men had been beaten by Dominic Thiem earlier in the group, their eagerly-anticipated duel was a straight shoot-out to join the Austrian in the semi-finals.

Roared on by the majority of the 17,000 fans in the arena, Federer produced an astonishing display of power, grace and precision and Djokovic simply had no answer.

Defeat for Djokovic means Rafael Nadal will end the year as world number one for the fifth time.

Djokovic served two double faults in the third game of the match and Federer pounced to break.

With Federer dropping only three points on serve in the opening set and serving eight aces, Djokovic was not given a sniff of an opportunity.

Federer faced only one break point in the match, in the fourth game of the second set, and saved it with a volley after battering a forehand deep into the corner.

He broke in the next game to lead 3-2 and again in the final game to win to deafening roars.