18-year-old Watson fell in the final round to top seeded Tamira Paszek of Austria 6-0 6-3.

World number 87 Paszek will now enter the main draw in Estoril where play began yesterday.

First round winners in the main draw include top seed  Alisa Kleybanova of Russia who had a comfortable win against Olga Govortsova 6-2 6-2.

Elena Vesnina, Alla Kudryavtseva and Casey Dellacqua also won through to the second round.

Meanwhile in the WTA Barcelona Ladies Open which is also taking place this week, top seed Marion Bartoli was dealt a blow in her preparation for the French Open when she was comfortably beaten in the first round by Magdalena Rybarikova of Slovakia 6-4 6-1.

World number 72 Rybarikova played better than the 2007 Wimbledon runner-up when it mattered - breaking Bartoli at each opportunity.

"I had to concentrate on every ball, because against such a rival things can start to turn at any time," said Rybarikova. "One panics, makes a few mistakes. So I'm very glad I was able to give such a concentrated performance."

Other winners in Barcelona on Monday included second seed Alexandra Dulgheru and sixth seed Roberta Vinci.