World number one Novak Djokovic grabbed the ATP World Tour Finals crown from Roger Federer with a 7-6(6) 7-5 win at the O2 Arena in London.

In a dramatic match in front of a boisterous and occasionally rowdy North Greenwich Arena, Federer went a break up in both sets but a combination of Djokovic’s combative qualities and worrying misses on the Swiss’s forehand saw the Serb triumph in two hours and 14 minutes.

While the match was a relatively scrappy affair by the standards of the world’s two best players, it was high on drama and there were plenty of spectacular points – the best of which was Djokovic’s diving winner down the line that saw him break Federer one last time to win his second season-ending title.

Djokovic adds the London crown to his Australian Open win in what has been one of the most competitive seasons of tennis in recent history, with four different Grand Slam winners.

"It’s an extreme honour for me to be here,” Djokovic said after his first win in the ATP World Tour Finals format which replaced the Masters Cup in 2009.

Federer, who was looking for a seventh season-ending title and a third in a row in London, must settle for this year’s Wimbledon crown and the world number two slot at the age of 31.

"There were too many turning points to pinpoint one moment,” Federer said afterwards.

"There were twists and turns and a bit of regret as I had the lead twice before him but I couldn’t get over the finish line and he could.

"When you play a match like today you can actually have fun and lose.”

It had started so well for Federer, who took the first two games to love as he rained aces and glorious backhands on a stunned Djokovic.

But, despite the Swiss having the edge on most of the first-set statistics as well as the quality of execution, the Serb is a scrapper, a street-fighter, and he hung on at the baseline to start forcing errors, particularly off Federer’s forehand.

Despite a brilliant Federer forehand getting the crowd on its feet, Djokovic broke back at 3-3 and again to take hold of the set – but Federer got his head together and, with the Serb serving for the set, levelled to 5-5 as he followed some glorious one-handed backhands with a killer forehand to force the miss.

A tie-break soon followed, and while Federer played some marvellous points, he was again his own worst enemy: as both men made miraculous drop shots at the net a wonderful scoop from the Swiss levelled at 6-6, but a terrible backhand miss gifted Djokovic the set point, which he duly gobbled up.

There was a sense of déjà vu about the second set as Federer again kicked off with a break, which he backed up until he was serving for the set – what should have been a backhand winner drifted wide, and two forehand misses saw Djokovic break back for 5-5.

With most anticipating the tie-break, Federer went aggressively at Djokovic’s next service game but, despite scrambling a few points, the Serb was constantly forcing the Swiss on to his forehand, holding to 30.

And as Federer served to stay in the match he appeared to wilt under the pressure as Djokovic watched two errors bring up match point. The manner in which he took it was exquisite though, the signature diving backhand down the line saying everything we need to know about his bravery and technique under pressure.

Both men will now take their holidays and start preparing for the 2013 Australian Open in January, with the Davis Cup final between Spain and surprise package Czech Republic the only remaining tennis of note this year.