STUTTGART - China's Li Na claimed a famous scalp on Wednesday when she defeated Serena Williams 0-6, 6-1, 6-4 at the Porsche Grand Prix tennis tournament and cost the powerfully-built American her world No1 ranking.

In a dramatic match which see-sawed several times, Li overcame a first-set crushing to put Williams under immense pressure.

'I was very nervous in the first set and I just didn't have a chance,' said Li, who lost to Russia's Dinara Safina in the Olympic Games semi-finals. She had also beaten Serena's sister, Venus, in the Beijing quarter-finals.

Williams started the second-round match with a hiss and a roar as she demolished Li 6-0 in just 21 minutes.

But the Chinese star replied by taking a 3-0 lead in the next set and used a strong baseline game to take seal it 6-1 in just 28 minutes.

The game was delicately poised at 3-3 in the third when Williams missed her line shot and was broken by Li, who extended her advantage to 5-3.

The American fended off three match points and held her serve to give herself a faint hope at 4-5 down.

But Li had different ideas. She defended a break point of her own before hitting her sixth ace of the game to win the match after 1hr 35min and reach the quarter-finals.

'I just started to make a lot of errors,' admitted Williams afterwards. 'I pretty much gave it to her, it was like I said, 'Here you go, you have a win today'.

'Maybe I started to doubt myself. I made a lot of mistakes, which helps her cause.

'She played really well, especially in the third set where she just fought for everything. I am disappointed I lost, especially so soon in the tournament.'

Williams will lose her No1 ranking to Serbia's Jelena Jankovic on Monday. The American had held the position since winning the US Open last month.

'To be quite honest, I don't deserve it playing like that,' said Williams. 'But I guarantee I will get it back.'

Joining Li in the quarter-finals was Olympic champion Elena Dementieva, who needed just over an hour to beat Austria's Sybille Bammer 6-1, 6-4 in another second-round match.

Earlier, fifth seed Svetlana Kuznetsova was a big-name casualty in the first round as she lost in three sets to Patty Schnyder of Switzerland.

Schnyder needed just over two hours to beat the 2004 US Open champion and this year's French Open semi-finalist 6-4, 4-6, 7-5 and take her place in the second round.

Kuznetsova made a slow start and was quickly on the back foot as the Swiss broke her early and served out the first set.

The Russian grew stronger in the second set to level the match, but Schnyder held her nerve.

Despite four aces from Kuznetsova in a tense final set, Schnyder broke the Russian, defended a break-point and then served out.

Schnyder, 29, ranked 11th in the world, will meet another Russian, Nadia Petrova, in the second round.