Venus Williams crashed out of Wimbledon as Centre Court fans and millions of television viewers were left in stunned confusion over a phantom point which helped Croatian teenager Karolina Sprem inflict the biggest shock so far of the 118th championships.

Sprem won a thrilling second-round tie 7-6 7-6 after veteran English umpire Ted Watts failed to spot that her serve, when she was 2-1 down in the second set tie-break, had drifted wide and eventually gave her the point after number three seed Williams put the ball back in play and was beaten by an instinctive back-hand.

It was a key moment on a poignant occasion as the American, twice champion at the start of the the Millennium and runner-up to sister Serena in the last two years, slumped to her earliest exit since her Wimbledon debut in 1997.

The 24-year-old said: "Sometimes you just meet a player who is better on the day and although it was obviously a wrong call I've never believed that one point should decide who wins or loses a match."

Williams won new admirers for her magnificent sporting attitude but she could hardly complain that much after going 6-3 ahead in the decisive tie-break - only to still lose it.

And although the shock value makes this a tale of a champion's painful demise, Sprem deserves enormous credit for a staggering performance that brought Williams to her knees.

The former champion admitted of her rival who is ranked 30 in the world: "I just think she played really well. She deserved to win.

"Is it painful for me? Well, it's not a barrel of laughs but I've had some great results in this tournament since 2000 and it is impossible to be a winner or finalist every year."

Sprem said: "It is only my second time at Wimbledon so it's really great - unbelievable for me.

"I'm working hard and playing well, but people ask if Venus is in decline. Is that because I beat her?"

Wimbledon officials later admitted that umpire Watts had blundered.

Sprem's win will stay in the record books but it seems certain Watts will face a grilling and possible disciplinary action from tournament referee Alan Mills.

Mills said in an official statement: "Regrettably the Chair Umpire made a mistake which ended up with the score being called wrongly.

"Although both players seemed perplexed, neither queried the decision and play continued, resulting in Miss Sprem winning the tie-break and the match.

"As neither player queried the score with the Chair Umpire at the time, the result stands as the mistake should have been rectified immediately. I shall be reviewing the matter with the Chair Umpire in the morning."

Venus is likely to return next year, but for Martina Navratilova, Wimbledon singles play is finally over.

The nine-time champion was beaten in a tight three-set match by Gisela Dulko, who triumphed 3-6 6-3 6-3.

The 47-year-old crowd favourite had taken the opening set with her aggressive serve-volley game, but Dulko forced a decider by winning the second set.

The Argentine, who also beat Navratilova at last month's French Open, grabbed the crucial early break in the final set though and went on to claim a narrow victory.

In the men's event, Greg Rusedski was delighted to let his tennis do the talking after belatedly getting his campaign under way with a comfortable victory over Italy's Davide Sanguinetti.

The British number three started with a 130mph ace and recovered from a brief lapse in the second set to record a morale-boosting 7-5 4-6 6-2 6-2 win, seconds before more rain caused another disruption to play.

The 30-year-old will now play eighth seed Rainer Schuettler of Germany in the second round after his sixth victory in 13 matches since being cleared of doping charges in March.

"I'm trying to put all that behind me because it's hard," said Rusedski, who has described the time he found out about the positive test for nandrolone until he was cleared as 'seven months of hell'.

"If you get emotional then you're not going to play well. That's why I was trying to be so focused. You don't want to let all those emotions out because you want to do well for yourself and the public. You just want to play good tennis."

Defending champion Roger Federer breezed into the third round with a ruthless demolition of Alejandro Falla.

Federer had not been in action since Monday afternoon's straight-sets victory over Britain's Alex Bogdanovic due to the bad weather, but looked in equally-commanding form on Court One.

The world number one and top seed was simply a class apart from his 20-year-old Colombian opponent, who had to battle through qualifying at Roehampton last week, racing to a 6-1 6-2 6-0 victory in just 54 minutes.

Federer broke Falla's serve twice in a row to take the opening set in 17 minutes, and although the second set was positively pedestrian in comparison at six minutes longer, the outcome was the same.

Seventh seed Lleyton Hewitt wasted little time disposing of Irakli Labadze.

The Australian, a champion here in 2002, always looked comfortable against the man from Georgia.

Labadze had his moments but even a couple of rain delays could not break the concentration of Hewitt, who hit 34 winners in the match and eventually eased to a 6-4 6-4 6-1 win.

Hewitt will now play Goran Ivanisevic in round three.

Ivanisevic had to use all of his experience to turn back the challenge of Filippo Volandri.

The Croatian, who insists this will be his final year at the All England Club, was taken five sets by Volandri, who had his chances but who ultimately could not solve the puzzle posed by Ivanisevic's booming serve.

Ivanisevic lost the first set and the crowd must have feared the worst as the next went to a tie-break.

However the Croatian, a shock winner here in 2001, held his nerve to level up.

He lost the next 6-1, but again roared back to win the fourth set 6-3.

A single break of serve was enough to win the decider, allowing Goran to serve out for a 4-6 7-6 (10-8) 1-6 6-3 6-4 victory.

British fans had more to cheer with Mark Hilton knocking out former French Open champion Albert Costa in straight sets.

Hilton, the diminutive 23-year-old left-hander from Chester, who is ranked 470th in the world, pulled off one of the best wins of his career, a 6-1 6-4 6-3 triumph over a man 415 places higher in the rankings.

Jonathan Marray blew two match points before losing to Karol Beck in an epic, missing a glorious chance to join fellow Britons Hilton and Tim Henman in the second round.

The 23-year-old Marray, who made Britain's Davis Cup squad earlier this year, had two match points against Beck, Henman's conqueror at Queen's Club recently.

The Sheffield player was on course for a notable victory when he wrapped up the third set and served for the match at 5-3 in the fourth.

He then dropped his serve to send the match into a deciding set but had two match points on Beck's serve at 6-5 only to put a forehand long at the crucial time.

Beck struggled to hold his serve amid the growing tension and then broke the Briton's serve in the 18th game to gain a 6-4 6-7 4-6 6-3 10-8 success.

Men's number two seed Andy Roddick was another first-round winner.

He was given a thorough workout in his rain-hit clash with Yeu-Tzuoo Wang before emerging a 6-3 7-5 6-4 winner.

Wang, ranked 181 in the world, was expected to provide the big-hitting American with few problems but he showed an impressive array of shots and gave a good account of himself, particularly in the second set.

Roddick's booming serve proved decisive, however, as the 21-year-old - who recently registered the fastest serve of all time at 153mph - fired 18 aces and enjoyed 41 unreturned serves.

Unseeded German Alexander Popp beat 15th seed Nicolas Massu on Court 10.

The big German, who has a British mother, was always on top against the Chilean, who never looks entirely comfortable on grass.

Popp used his booming serve to dominate, and eventually breezed through 6-2 6-4 6-4.

Another German Rainer Schuettler was pushed all the way by plucky Swede Robin Soderling.

Schuettler, seeded eight this year, was given a real fright by Soderling, who hit 10 aces in the match.

Schuettler, who has not enjoyed a vintage start to 2004, used all his experience in the last to finally prevail 2-6 6-3 7-6 (7/5) 1-6 6-2. He now faces Rusedski in the second round.

Meanwhile French Open runner-up Guillermo Coria moved into round two when he finally completed another rain-delayed match against Wesley Moodie on Court One.

The encounter had been held over from Monday and Tuesday, and the five-setter had been unable to be finished before Thursday morning due to the continued inclement weather at SW19.

When play finally resumed, Coria needed only a matter of minutes to finish off the game, claming a 6-4 6-7 (3-7) 6-3 6-7 (3-7) 6-3 victory when Moodie's return was long.

In second-round action, sixth seed Juan Carlos Ferrero fought back from two match points down to beat Stefan Koubek.

The former French Open champion was in big trouble when he stood 5-4 40-15 down on Koubek's serve in a thrilling final set.

But the Spaniard kept his nerve to save both and then went on to clinch a 4-6 7-5 5-7 7-6(8-6) 8-6 victory.

Ferrero next faces fellow seed Robby Ginepri in the last 32.

Ninth seed Carlos Moya came through in four sets against Radek Stepanek - to book a third-round spot at SW19 for the first time in his career.

The Spaniard, who until this year had never been beyond round two at the All England Club, played some fine tennis at times against his always-dangerous opponent from the Czech Republic.

Moya, another former French Open champion, was always in command despite a wobble in the third set and eventually came through 6-4 6-4 6-7 (5/7) 7-5.

In the women's event, British number one Anne Keothavong's run was halted by Russian sensation Maria Sharapova, the 13th seed who is seen as a dark horse for the title.

The 20-year-old Londoner made light of the gap of 173 places in the world rankings in a close-fought first set but crumpled in the face of a second-set onslaught and went down 6-4 6-0 in just 65 minutes.

Sharapova's victory sets up a clash of the pin-ups with Daniela Hantuchova, the Slovak who received a walkover into the third round when her scheduled opponent, Elena Bovina, withdrew through injury.

Elsewhere, Hull schoolgirl Katie O'Brien failed to join the renaissance of British women's tennis when she lost her rain-hit first-round match with Spain's Maria Sanchez Lorenzo.

The 18-year-old, who is juggling her A-levels with her Wimbledon debut, was hoping to join four other Britons in the second round of the women's singles.

But the youngster, who is ranked 576th in the world, trailed 4-6 4-5 when rain drove the players from court 11 on Tuesday and the Spaniard took just two minutes to wrap up a 6-4 6-4 victory, winning all four points to be played.

Emily Webley-Smith joined her through the exit door as she suffered second-round heartache.

The British hope was beaten 6-2 3-6 8-6 by 31st seed Amy Frazier in the early-evening sunshine.

Fourth seed Amelie Mauresmo wasted little time in booking a place in round two.

The Frenchwoman's first-round encounter with Jelena Kostanic of Croatia had also been held over from Tuesday because of the rain.

And despite another short break midway through the second set after more inclement weather swept over SW19, the world number four took just 61 minutes to record a 6-2 6-3 victory.

Two-time semi-finalist Jennifer Capriati, the seventh seed from the United States, beat Claudine Schaul of Luxembourg 6-2 6-2.

The American was always in control, hitting just 15 unforced errors as she overwhelmed her opponent from the baseline.

She next plays Briton Elena Baltacha.

Former champion Lindsay Davenport had an even easier passage into the third round.

Opponent Kristina Brandi retired injured at the start of the second set to hand Davenport a walkover win with the score at 6-0 1-0.

French Open champion Anastasia Myskina had a harder time late in the day.

She was given a serious scare out on Court Two before squeezing into round three.

Playing on the court nicknamed the 'Champions' Graveyard', Myskina looked to be joining the big names shocked on this famous patch of grass when she lost the first set to Hungary's Aniko Kapros.

The Russian second seed was twice broken as she lost control of the opening set before fighting back to claim a 5-7 6-2 6-4 victory.

But former champion Conchita Martinez was ousted by unheralded South American Milagros Sequera, losing 6-4 7-6 (8/6).

And popular 24th seed Mary Pierce was dumped out by Spain's Virginia Ruano Pascual.