The top seed Angelique Kerber was the biggest casualty on Monday as she lost a thrilling contest with Garbiñe Muguruza 4-6, 6-4, 6-4.

Kerber was relegated to No2 Court for the second round in succession but, alongside her Spanish opponent, she delivered a match deserving of a bigger stage, topped by a spectacular third set which featured five breaks of serve.

The first set was well matched until, at four games each, Muguruza lost control of both her serve and her forehand. Two unforced errors were followed by a final decisive mistake on her backhand as the ball drifted wide of the left-hand service line. Kerber stepped up and served out.

The shape of the match was by now determined; two focused, energetic players exploiting each other’s uncertain serves to create an even, unrelenting contest. The second set followed the path of the first, going with serve until 5-4. Muguruza took Kerber to deuce, then advantage, before pouncing on a weak serve with a powerful backhand. The German lurched, stooped, flicked the ball back and Muguruza drove home the set point.

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In front of a full house and with much of the crowd behind her, Kerber remained the favourite to prevail, her endless running and resolve having seen her come from a set down against Shelby Rogers for victory in their third-round match on Saturday. She broke Muguruza in the first game of the third off three unforced errors from the Spaniard.

Muguruza struck back to make the score 2-2, the decisive stroke a dominant forehand at the net to finish a 14-shot rally. Kerber then broke back immediately, winning five points on the bounce. Muguruza in turn made it 3-3 with another break, featuring an exquisite lob for break point and then finally held her serve after a game of five deuces. Once again the set reached 5-4 to Muguruza and once again she broke when it mattered most, claiming match point at the third attempt with a low, fearsome backhand return that Kerber could only hit into the net.

Kerber not only went out of the tournament with this match but lost her No1 ranking. Speaking after the match, however, Kerber said she had been pleased with her performance. “I think we both played a good match. But at the end I think just two points that decides it,” she said. “Of course I’m disappointed that I lost the match, because I was really playing well. It was for sure my best match for a long time but at the end just one can win, and that was not me today.”

Muguruza also paid tribute to her opponent and hailed the quality of the contest. “I know I won it, but it was a good match for both of us. Every match I play against Kerber is like that. I remember two years ago when we played here, was a quite similar match. I’m happy that it went my way, of course, after fighting there for two hours.”

The second seed Simona Halep survived a scare against the resurgent Victoria Azarenka to reach the quarter‑finals 7-6, 6-2. Azarenka, the former world No1, playing her first major since the birth of her son Leo, broke serve twice in the first set only for the Romanian to claw her way back to a tiebreak, which she won 7-3. The second set was a more serene affair for Halep, who broke twice to win in 35 minutes, and will face Johanna Konta on Tuesday.

On Centre Court Venus Williams, at the age of 37, became the oldest woman to reach the quarter-finals since Martina Navratilova in 1994. The five-times champion barely needed to break a sweat as she won 6-3, 6-2 against the 19-year-old Croat Ana Konjuh, who was yet to be born when Venus made her Wimbledon debut in 1997.

Williams hit 24 winners to her opponent’s 12, won 86% of her first serve points with an average speed of 107 mph and got 75% of her returns in.

Speaking afterwards she said there were “no secrets” to her longevity. “I just keep stretching,” she said. “I think I stretch a little harder now. But only because I enjoy it.”

Elsewhere in the women’s draw Jelena Ostapenko continued to enhance her rising reputation with a 6-3, 7-6 win over the No4 seed Elina Svitolina and will now face Williams in the quarter-finals. On Court 18 the qualifier Petra Martic had hopes of joining the more illustrious names when she came back to tie her match against Magdalena Rybarikova 6-4, 2-6. But after an exchange of breaks the Slovakian held out to win the final set 6-3.

Coco Vandeweghe also pulled off her own small shock, the No24 seed beating Caroline Wozniacki 7-6, 6-4, and completing the lineup is the Russian Svetlana Kuznetsova who defeated Agnieszka Radwanska 6-2, 6-4.