(AFP) - Canadian teenager Denis Shapovalov shocked top seeded Rafael Nadal to reach the quarter-finals of the ATP Montreal Masters tournament, spoiling the Spaniard's chances of returning to world No. 1.

The 18-year-old Shapovalov, who needed a wild card to get into the tournament, continued his giant killing form at the hardcourt tournament by rallying to beat Nadal in three sets, 3-6, 6-4, 7-6 (7-4) on Thursday (Aug 10).

Nadal would have returned to No. 1 in the world if he had defeated Shapovalov, and then Chung Hyeon or Adrian Mannarino on Friday.

Shapovalov's stunning upset against the reigning French Open champion came as a result of some inspired tennis in front of a boisterous home crowd who cheered his every shot.

Shapovalov had just three wins this season coming into the tournament. He quickly got on a roll in Montreal beating Brazil's Rogerio Dutra Silva in the opening round 4-6, 7-6 (10-8), 6-4. He defeated former US Open winner Juan Martin Del Potro in the second round in straight sets 6-3, 7-6 (7-4) to set up the showdown with Nadal.

Shapovalov won seven of the final eight points of the third set tiebreaker before closing out the match with a forehand winner down the line. He celebrated by falling onto his back then covering his face with his hands.

Shapovalov blasted a total of nine aces, including ones on his second serve that handcuffed Nadal. He also had seven double faults and won 67 per cent of his first serve points.

Nadal won 77 per cent of his first serve points but had just two aces and six double faults in the 2hr 45 minute centre-court match.