As Roger Federer exited centre stage at the O2 Arena yesterday, it was tempting to think that it might be the last time the 17-times grand slam champion makes it to the season-ending Barclays ATP World Tour Finals.

His hopes of ending his least successful year in more than a decade on a high were finished by Rafael Nadal, whose 7-5, 6-3 victory took him into the final for only the second time in his career.

While world No.1 Nadal will today take on the man he displaced at the top of the rankings, Novak Djokovic, for the title, Federer will end the year with his lowest ranking since 2002 and having failed to reach a grand slam final for the first time since then.

At 32, there will be plenty of critics willing to write him off as a threat for the sport's biggest titles, but as he considered a difficult 12 months, there was no defeatism, rather optimism, that if he can stay fully fit he can continue to compete with the best.

"I think something's possible for next year," Federer said. "It was a stronger finish than I thought it was going to be in Basle, Paris and London. I'm more positive now than I would have been a few months ago, where I wasn't quite sure what to expect after the US Open.

"I'm confident and excited going into the off season and starting again next year. The rankings are secondary for me; it's important to stay within a certain ranking but I need to make sure I stay competitive, I can hang with the best and, particularly, beat the best."

Yesterday, there were moments when he looked like he might upset Nadal, especially when he broke back for 5-5 in the opening set. But, as he admitted, he was not consistent enough for long enough to get it done and a ruthless Nadal took advantage.

Federer began well enough but there was always a hint of flatness about him, his footwork not quite at its best and his ability to find the right shot at the right time, on the big points, not quite there. Once Nadal had taken the first set there was little chance Federer would be able to fight back.

It was a few weeks after the US Open, where he lost in the fourth round, that Federer cut ties, amicably, with his coach, Paul Annacone. A new coach could galvanise him for 2014, and having shown lately that he is still capable of beating the top players, Nadal and Djokovic aside, as well as the absent Andy Murray, Federer is confident that good times are still to come.

"Beating two top-10 players [Juan Martin del Potro and Richard Gasquet] is a good thing for me after not having beaten any for almost seven or eight months," he said. "Considering the back issues I've had, I'm pleased that I'm pain free.

"Clearly grand slams are going to be part of my highlights, hoping to make sure I play my best there and some selective other events that I consider important to me, some of the Masters 1000s. Then, hopefully, I will have something left for the World Tour Finals at the end of next year, because that's clearly a goal."

Nadal, ever the gentleman, said he expected Federer to be a contender when the season begins in Australia in January. "I am sure today he was a little bit tired after the match yesterday and I know he had back problems earlier in the year," he said. "I am sure that he will have the chance to start the next season [fully fit] and he will be one of the candidates to win in Australia."

Defending champion Djokovic cruised into the final with a 6-3, 6-3 win over another Swiss, Stanislas Wawrinka, ending his hopes of finishing the year as the Swiss No 1.