Adelaide: Five-time Olympic champion Ian Thorpe's bid to compete at the London Games suffered a major blow on Friday when he failed to make the final of the 200 metres freestyle at Australia's national swimming trials in Adelaide.

Thorpe, who will also compete in the 100 freestyle at the weekend, finished 12th fastest of the semifinalists, outside the top eight that will contest Saturday's final.

Headliner Thorpe was greeted by a huge roar by a packed crowd at the 3,000-seat arena but the silence was deafening after he flagged dramatically in the last lap to finish with a time of one minute, 49.91 seconds, more than two seconds behind pace-setter Ryan Napoleon.

"I'm terribly disappointed," Thorpe said in a poolside interview at Adelaide's South Australia Aquatic and Leisure Centre.

"This is slower than what I swam this morning ... The fairytale has turned into a nightmare. I'll hear about it tomorrow."

Thorpe had raised huge expectations after he qualified fifth fastest in the morning session.

His one minute, 49.16 seconds was his fastest swim in the distance since returning to competition in November, but more than five seconds adrift of his personal best set in 2001.

After more than five years away from the pool, the 11-time world champion announced his return just over a year ago with the aim of qualifying for his third Olympics.

He has struggled to post competitive times since returning to competition in November, fuelling speculation by local media that he had been keeping his powder dry, despite repeatedly writing off his own chances.

The 200 was Thorpe's best chance of making the Australia team, with the 100 boasting an ultra-competitive field including world champion James Magnussen and the other three members of the gold-medal winning relay team from last year's world championships in Shanghai.

Thorpe's London bid has attracted huge interest and media attention, as sell-out crowds at the 3,000-seat arena for the evening session finals over the next four nights.