Spaniard needs to reach the semi-finals in Montreal to return to top spot as Murray fails to recover from hip injury in time.
Nadal set to reclaim No 1 ranking after Murray withdraws from Rogers Cup
Andy Murray is in danger of losing his world No 1 ranking to Rafael Nadal after withdrawing from next week's Rogers Cup in Montreal as he continues to recover from a hip injury.
Murray, 30, has been in rehabilitation from the problem that ruined his Wimbledon campaign, but the tournament in Canada has come too soon.
"I am sad to be missing the tournament in Montreal because I have many great memories from my time in Canada," he told the tournament website. "I am doing everything I can to return as quickly as possible."
His withdrawal casts further doubt on his fitness for the US Open, which begins later this month. Murray went into last month's Wimbledon carrying a hip problem and it was doubtful whether he would even be fit enough to defend the title he won in 2016.
He was visibly limping through games, but looked to be managing it until his quarter-final with Sam Querrey. After taking the third set on a tie-break, Murray's body gave up on him and the American raced through the final two sets, with the Scot hardly able to move.
A leading hip surgeon said after Murray's exit that he had a 50 per cent to make the US Open, but hopes were raised after he posted a video of himself on Instagram tentatively hitting a ball against a wall.
It is the second year in a row he has pulled out of the Masters 1000 event in Canada - alternated each year between Montreal and Toronto - after missing it last year in preparation for the Olympic Games in Rio de Janiero.
"We would have liked for Andy to be able to defend his title that he won here in 2015, but we wish him a very speedy recovery," tournament director Eugene Lapierre said.
Murray is listed to compete at the US Open's final warm-up event - the Western & Southern Open in Cincinnati - starting on August 14 but there is no word yet on whether he will be there.
It means that next time he takes to the court he may no longer be world No 1 as Nadal closes in on his top spot.The Spaniard is seeded first in Montreal and will return to the top of the rankings if he gets to the semi-final.
Murray joins Stan Wawrinka and Wimbledon runner-up Marin Cilic in pulling out of the event while Novak Djokovic will also be absent having confirmed he will miss the rest of the season due to an elbow injury.
* Press Association