A 3-2 defeat by Italy on the clay of Naples ended their hopes of reaching the last four as Andy Murray was well beaten by Fabio Fognini and James Ward came up short against Andreas Seppi yesterday.
But for a team that was hanging around with the likes of Luxembourg a few years ago, a quarter-final defeat by a solid Italy team, at home on their favoured surface, represents major progress.
"We're all absolutely gutted we lost this because we saw the chance of a semi-final place and it would have been at home so we'd have been in a strong position," captain Leon Smith said. "Losing is never easy, despite going up against a very strong Italian team. I'm very proud of what the team has done this weekend and getting to this stage of the competition. It gives us something to build on, learn from, and we can just keep improving as a team and staff so that we can get ready for 2015."
Britain will remain in the elite world group of the competition next year, thanks to their first-round win in the United States, a fine victory in its own right.
But having gone so close to reaching the last four, Britain will wonder if, had Murray had not suffered a stomach illness in the days leading up to the tie, or had he had a couple more months of tennis under his belt since back surgery in September, they might have won.
"He's had a tough schedule and he's still coming back from that lengthy injury time-out last year," Smith said. "It's going to take time to build up, but every passing week he just looks better and better. I thought this week he played some great tennis and he'll get stronger again. There's no doubt he'll look back and be very disappointed to lose, but I think he should be proud of his efforts."
Murray, who completed his singles win over Seppi on Saturday morning before partnering Colin Fleming to victory in the doubles, did not make any excuses for his defeat by world No.13 Fognini, who showed how good a clay courter he is with a near flawless performance.
The Italian dropped serve in the opening game but that was Murray's last bit of joy as he was made to work brutally hard to even win points at some stages. In the past, Fognini's temperament has let him down on big occasions but he was focused throughout and deserved his 6-3, 6-3, 6-4 victory.
"He played some great stuff at important periods in the match and that was the main difference," said Murray, beaten in a Davis Cup singles for only the second time in his career. "When I had my main opportunities I was a little bit disappointed in myself, and when he had his he was exceptional, so credit to him."
Tied at 2-2, it was left to Ward to try to replicate his form from the tie in the USA, when he beat San Querrey on the opening day to set the tone.
But though Seppi was clearly nervous, his greater experience and clay-court know-how paid dividends and he eased to a 6-4, 6-3, 6-4 win to clinch Italy a semi-final with Switzerland.
Murray's next outing will be on clay in Madrid in a month, ahead of the French Open in late May.
Switzerland's hopes of a first Davis Cup title remain alive after Stanislas Wawrinka and Roger Federer clinched a tense victory over Kazakhstan in the quarter-finals. The Swiss were on the verge of a shock loss in Geneva after losing Saturday's doubles to trail 2-1.
Wawrinka, beaten by Andrey Golubev on Friday, appeared to be finding life as Swiss No.1 tough but he dug deep to beat Mikhail Kukushkin 6-7 (4-7), 6-4, 6-4, 6-4.
That drew Switzerland level and left Federer in a deciding rubber for the first time in his career, against Golubev. The Kazakh had been the player of the tie but upsetting the 17-time grand slam champion proved beyond him as Federer triumphed 7-6 (7-0), 6-2, 6-3.
France managed an even more impressive comeback after turning around a 2-0 deficit to beat Germany 3-2. Victory in the doubles had kept alive France's hopes after two shock singles wins for Germany on the first day in Nancy, and Jo-Wilfried Tsonga made a fine start to the final day by beating Tobias Kamke 6-3, 6-2, 6-4.
France captain Arnaud Clement replaced Julien Benneteau with Gael Monfils for the deciding rubber and the talented 27-year-old repaid his faith with a 6-1, 7-6 (7-0), 6-2 victory over Peter Gojowczyk, who had beaten Tsonga on Friday.
In the last four France meet two-time defending champions the Czech Republic, 5-0 winners over Japan.