Rafael Nadal overcame Roger Federer 5-7, 6-1, 6-3 to reach the Madrid Masters final on Saturday on an emotional day that had started with a tearful tribute to Seve Ballesteros.

World number one Nadal stood side-by-side with old rival Federer in a minute's silence at the Caja Magica before a showreel of Ballesteros's greatest moments played out on the giant courtside screens.

"It's a terrible day for Spain and the world. We lost a great champion, probably the greatest in the history of Spain," said Nadal of the 54-year-old golfing legend, who lost his brave fight against cancer.

"Seve was one of the pioneers in so many things ... especially in golf. He was an example to everyone."

Despite the sombre occasion, Nadal, with a black ribbon pinned to his shirt as a mark of respect for his compatriot, went on to thrill his fans and reach his third Madrid final in three years.

He will face either world number two Novak Djokovic or Brazilian outsider Thomaz Bellucci for the title on Sunday.

World number one Nadal will be bidding for his third clay title of the spring after Monte Carlo and Barcelona.

He has now beaten Federer in 11 of 13 meetings on clay and stands 16-8 overall in their epic series.

It was the third straight year the all-star pair had played in Madrid, with Federer winning the 2009 trophy and Nadal doing the same 12 months ago.

Nadal's victory on Saturday was his 37th straight win on clay, a streak dating back to the French Open in 2009.

"I'm glad to have have won, but it was not our best match. It was an emotional day for me and Spain," added Nadal.

Federer now heads to the Rome Masters with a 26-7 record for the season and one title from Doha, having played his last final in Dubai in February.

"It was a good match, I had lots of chances. Everyone knows Rafa plays extraordinary on clay," said Federer. "I played aggressive and had lots of winners but lots of errors, that's how it goes.

"But I'm happy with my performance. I want to look ahead to Rome and Roland Garros. I'm sorry I lost but pleased to have played another semi against Rafa.

"It was very close. Maybe the result does not show it as such but I was right there until the end."

The Swiss world number three started the match poorly, losing his first service game, which was marred by a double-fault and an over-hit forehand.

The 16-time Grand Slam champion also failed to convert any of three break points in a lengthy fourth game, with Nadal eventually stretching his leading margin to 4-2 with a love game.

But the Swiss worked his magic to get back to level-pegging, 4-4, and held in dramatic fashion after saving three break points in the 11th game for 6-5.

A sizzling Federer passing shot to the far reaches gave him a set point, which he finished cleanly with a down-the-line winner, breaking Nadal for the second time and taking the early lead after 64 minutes.

But the Swiss suffered a reversal in the first game of the second set, with Nadal breaking via a controversial ball deemed good by chair umpire Mohamed Layhani to the dismay of Federer, who argued the point before getting back to work.

Federer seethed quietly throughout the set as Nadal squared the match.

In the decider, Federer went down a break 1-3 on a forehand called out by centimetres, then dropped serve in the next game.

It set the tone for the remainder, with Nadal scraping home on his first match point as Federer netted a backhand.