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Nick Kyrgios pulls pin on Adelaide exhibition to rest his injured knee

Nick Kyrgios has withdrawn from the World Tennis Challenge in Adelaide as he exercises "extreme caution" in hope of giving himself every chance of overcoming a worrying knee injury and contending for Australian Open glory.

Kyrgios is relying on a course of cortisone to help him through the season's first grand slam starting on Monday, but is feeling considerably more upbeat after taking down Rafael Nadal in a Fast4 exhibition match in Sydney.

"Even though it was Fast4, you still take confidence out of how you were hitting the ball, the way you're serving, the way you're returning," Kyrgios said.

"I thought I did everything pretty well. It was pretty tough. I though the level was high.

"He played well, I was serving really well. We weren't taking it easy at all. We were both going 100 per cent."

The 2015 Open quarter-finalist said he started to "feel" the knee injury towards the end of his one-hour, 45-minute workout on Monday night.

"If I can't play Fast4, then it's not going to be looking great for a best-of-five at a grand slam," Kyrgios said.

"But I'm really happy with how it pulled up. The level was really, really good.

"I've just got to do all the right things: ice it now and look after it and just take extreme caution."

Fellow Australian young gun Thanasi Kokkinakis has also had to drop out of his pre-Australian Open commitments, dropping out of the Sydney International because of an abdominal strain.

Kokkinakis had been set to make his long-awaited singles comeback on Tuesday in Sydney, but tournament organisers have confirmed he won't face compatriot Jordan Thompson.

A shattered Kokkinakis will have scans this week, with the 20-year-old unsure how serious the latest setback is.

Krygios pulled the pin on the Adelaide exhibition event on Tuesday afternoon and said basketball was also off the table after the world No.14 first suffered the injury playing his second sporting love.

"I'm not allowed to," Kyrgios said.

"Obviously, I want to play but my team has told me: 'Nick, you've got a couple of pretty big couple of weeks now coming up.'

"I can play afterwards so I'm leaving it for a little bit."

The coachless star admitted a lack of strength and conditioning work before his intense summer block of training had caught up with him.

"I guess it was just load," Kyrgios said.

"I had a week off in the Bahamas not doing much and then I went into pretty heavy training and, obviously, I didn't have my strength and conditioning for a little bit by myself so I was just playing and, obviously, I wasn't looking after it.

"I mean, you live and learn."

Kyrgios said it was heartening to hear Nadal label him a future grand slam champion.

"It's always nice hearing it," he said.

"I've made a couple of quarter-finals, but I've got a long way to go."