Greg Rusedski, trying to keep the tightest of grips on his emotions as the disappointment and frustration flooded his mind and body, had no doubts about the significance of yesterday's 6-4, 6-3, 1-6, 6-3 defeat by Tim Henman here in the third round of the Australian Open.

"I felt like this was my tournament," he said afterwards. "I've beaten everybody left in the bottom half of the draw. But I just didn't do it."

Henman did, and now has the best possible chance to reach his first grand slam final, having eased open the door on three occasions at Wimbledon only to have it firmly shut in his face by Pete Sampras in the 1998 and 1999 semi-finals and by Goran Ivanisevic in last year's.

He is, after all, at number six the highest seed left standing after an incident-packed first week and should really fear nobody in the next three rounds before the final a week tomorrow. But there remains an awfully long way to go, and to date he has never progressed beyond the last 16 of any grand slam other than Wimbledon in 19 attempts.

"For me to start looking at the final is a million miles away," Henman said. "I've got a difficult match against Jonas Bjorkman (tomorrow), someone I've a losing record against. I'm going to have to play well to beat him."

Most of all, Henman has to guard against beating himself. Having established a two-set lead over Rusedski with his very best tennis - notably some high-quality returns and stunning volleying - he let his compatriot come back from the dead and then came close to choking as he served for the match at 5-3 in the fourth set.

"Same old Henman," muttered a Dutch journalist. There are few who do not admire the British unmber one's natural ability, but all are aware of his frailty under pressure. Larry Stefanki, his American coach, has been working hard to cure him of this weakness, principally by building on his strengths.

It is obvious that Henman is one of the best volleyers in the game, and equally obvious that to capitalise on this he needs to get his first service in far more regularly. So Stefanki has encouraged Henman to go for placement rather than flat-out speed, the consequence being that his first-serve percentage has increased significantly and thus he has increased his volleying opportunities.

In itself this all-British third-round encounter was the little big match. The Australians, having lost all their male players, made some effort to build it up as the Battle of Britain, but not very convincingly. The rest of the tennis world either ignored it or sat back with a sardonic smile and asked whether the Englishman would lose to the Canadian, which is how they continue to regard the Montreal-born Rusedski.

The evening was fine and the roof open. With Rusedski serving at 4-5, a silver gull from the nearby Yarra river circled the court. A sublime lob and a rocket of a forehand reduced Rusedski to 0-30 while the gull distracted the 15,000 fans.

Had there been a crossbow handy, and notwithstanding the Rime of the Ancient Mariner, Rusedski might have been tempted to take a pot. The crowd eventually roared the bird away but the British number two's concentration had been shattered and he lost the opening set.

A quick break in the second swung the match further Henman's way, but when he came to serve for a two-set lead, his suspect nerves almost did for him. At 3-5, Rusedski had two break points and will forever believe that the second should have been his.

Henman hit a strangely tentative volley which appeared to drop beyond the baseline. Perhaps it clipped it, but Rusedski thought differently and, as the Australians say, spat the dummy.

He was still seething at the start of the third set when Henman had four break points. The match might have been all but over; instead Rusedski converted the fires of rage and frustration into flames of inspiration and raced through the third.

The Australian crowd, for the most part politely quiet in the face of a very British affair, began to warm to the possibility of a five-setter. But Henman cut such ideas short, changing his tactics slightly by not rushing the net on every occasion and offering less of a target.

Rusedski faltered and Henman reapplied his grip, only to falter again when serving for the match. Rusedski had three break points, but a high backhand volley saw Henman home.

"I didn't get one call in my favour," said Rusedski, which was true, but Henman played superlative tennis in the opening two sets. Whether he can continue to do so is the big question.

Rusedski believes Jiri Novak (the number 26 seed) and Thomas Johansson (16) may be the main threats. "But if you look at the section you think, Jeez, that looks great. I mean, I would be happy if I were in Tim's place."

Had Rusedski won, which he never looked like doing, he might well have gone on to his second grand slam final, having lost to Pat Rafter in the US Open in 1997. The case for Henman is less convincing, principally because of his acute vulnerability under pressure.

In other matches yesterday, American giantkiller Alex Kim, who knocked out fourth seed Yevgeny Kafelnikov of Russia in the second round, had little time to savour the glory. He lost in straight sets to another qualifier, Fernando Gonzalez of Chile.

Bjorkman, an Australian Open quarter-finalist in 1998, beat 12th seed Guillermo Canas of Argentina 6-3, 6-2, 6-4 and leads Henman 4-2 in head to heads.

"I'm looking forward to it," he said. "I like playing Tim."

Sweden's Thomas Johansson also made the last 16, beating Younes El Aynaoui of Morocco.