Britain lost their opening ATP Cup tie after Jamie Murray and Joe Salisbury were beaten in a thrilling match ending at 2:47am local time in Sydney.
With the tie with Bulgaria locked at 1-1 after the singles, Salisbury and Murray lost 7-6 (7-5) 6-7 (2-7) 11-9 to Grigor Dimitrov and Alexandar Lazarov.
The Britons were unable to convert two match points in the match tie-break.
Britain started the inaugural event with Cameron Norrie's win before Dan Evans lost to Dimitrov in the singles.
Norrie gave his side a 1-0 lead in the tie with a 6-2 3-6 6-2 victory over world number 423 Dimitar Kuzmanov, but Bulgaria levelled when US Open semi-finalist Dimitrov beat Evans 6-2 4-6 6-1 to set up the deciding doubles rubber.
That left Britain's fate in the hands of Murray and Salisbury, playing together for the first time as the nation's highest ranked doubles players.
But they were edged out in a tense finale to leave Britain, without the injured Andy Murray, needing to beat Belgium on Sunday to stand any chance of avoiding an early exit from the new 24-team tournament.
After the Bulgarian pair edged a tight first set, Murray and Salisbury broke early in the second set and maintained their slender advantage until the latter stages when Dimitrov and Lazarov swung momentum back in their favour.
Murray was unable to serve out the set at 5-4 as Bulgaria took their first break point since the third game of the match to level at 5-5.
Like the opener, it also needed a tie-break to separate the teams. But this time it was Britain who dominated, a beautiful lob by Salisbury teeing up four set points of which they needed just one when Dimitrov planted a volley wide.
That meant a first-to-10 match tie-break started about 2:30am at a sparsely-populated Ken Rosewall Arena, with Britain edging 4-2 ahead after a rare double fault from Dimitrov.
The mistake from former world number three Dimitrov did not prove costly, however, as the inspired Bulgarians fought back to 8-7 before showing more resilience to save the two match points.
Lazarov, ranked 477th in the doubles and outside the top 500 in the singles, put away a volley for 10-9 to tee up their first match point, which they took when he hit a perfect inside-out forehand down the line.
If it had not been for Andy Murray's late decision to use his protected world ranking of two, Great Britain might not have qualified for the inaugural event because their other players may not have been ranked high enough.
But then the 32-year-old Scot, who only had career-saving hip surgery last January, announced on Saturday he would not play after "a setback" with the pelvic injury he has been nursing since the Davis Cup finals in November. James Ward was called up in his place.
Norrie, ranked 53rd in the world, was far from his best against the lower-ranked Kuzmanov, but eventually had enough quality to come through by converting his sixth break point of the match to win in almost two hours.
Murray's absence means Evans, the world number 42, is Britain's leading player and that pitted him against former world number three Dimitrov.
After a confident opening set where he broke serve three times, Evans lost his way in the second and allowed Dimitrov to level with a crucial break in what proved to be the final game of the set.
From that point Dimitrov took control and clinched victory in two hours and 16 minutes at about 12:10am local time, meaning the doubles rubber would not start until about 1am.
What else happened on the opening day?
The 24-nation event features six groups of four teams, who each play three round-robin ties. The ties - comprising two singles matches and one doubles - are best of three.
The six group winners, plus the best two runners-up, will progress to the quarter-finals.
Australia took an unassailable 2-0 lead over Group F rivals Germany after wins for Nick Kyrgios, who broke into tears when speaking about the wild bushfires across Australia after the match, and Alex de Minaur.
Kyrgios won 6-4 7-6 (7-4) against Jan-Lennard Struff before 20-year-old De Minaur fought back from a set and a break down to beat world number seven Alexander Zverev 4-6 7-6 (7-3) 6-2.
The hosts completed a 3-0 win when John Peers and Chris Guccione won 6-3 6-4 against French Open men's doubles champions Kevin Krawietz and Andreas Mies.
In the same group, Canada's Felix Auger-Aliassime and Denis Shapovalov led their nation, who were runners-up at the Davis Cup finals in November, to a 3-0 win over Greece.
Norway earned a shock win over the United States in Group D. Talented 21-year-old Casper Ruud led them to victory by beating big-serving John Isner in three sets.
The Americans had led through Taylor Fritz's straight-set win over Viktor Durasovic but Ruud saved two match points before levelling the tie with a 6-7 (3-7) 7-6 (12-10) 7-5 win over the world number 19 in two hours and 43 minutes.
Ruud then teamed up with Durasovic to beat Rajeev Ram and Austin Krajicek and spark jubilant celebrations from the Norway squad.
In Britain's Group C, Belgium eased to a 3-0 victory over Moldova, who received an apology after the wrong anthem was played before their tie.