A 91st-minute header from Christian Panucci ended Scotland's hopes of qualifying for Euro 2008 and sent Italy through with a 2-1 win.

It was desperately cruel on the Scots, who produced an excellent performance and made the world champions look disorganised and nervy. Barry Ferguson had brought the hosts level following a Luca Toni opener after just 70 seconds.

A draw would have kept Scottish hopes alive, needing Ukraine to beat France on Wednesday. But Panucci ensured both of last year's World Cup finalists qualify instead.

The winner came from an Andrea Pirlo free-kick that was shockingly awarded after Giorgio Chiellini barged Alan Hutton.

But the Tartan Army cannot dwell too much on referee Manuel Mejuto Gonzalez's decision, as their goal stood despite Ferguson scoring from an offside position, while Antonio Di Natale had a seemingly valid goal disallowed.

Having become his country's hero with the winner against France in Paris, James McFadden failed agonisingly to repeat the trick late on.

With the scores locked at 1-1, he was supplied by a Kenny Miller pass across the face of goal, but sent his close-range effort wide with the net gaping and Gianluigi Buffon nowhere.

It was the miss that put the final nail in Scottish hopes of victory, and the winning goal most likely served only to hasten the inevitable.

Fifty-thousand crammed into a buzzing Hampden Park, hoping to witness the successful culmination of an extraordinary campaign that took in wins at home and away against France.

It could hardly have started worse, as Di Natale twisted into space on the left side of the box and squared low for Toni, who stole in front of his man and prodded powerfully into the roof of the net.

Alex McLeish's side took some time to settle after that early shock, but began to compete well in midfield with a five-man unit behind lone striker McFadden.

Just after the quarter-hour there was a big penalty shout when Gianluca Zambrotta blocked a shot with his upper arm, but the referee gave nothing.

Soon after, the impressive right-back Hutton glanced a header just wide before some excellent interplay from Darren Fletcher, McFadden and Ferguson resulted in a decent Buffon save.

On the half-hour, it looked like Italy were two goals to the good when Di Natale snaffled the rebound following a remarkable Craig Gordon save from Massimo Ambrosini, but the goal was mystifying ruled out.

David Weir was inches from levelling the scores in first-half stoppage time, only to see his header cleared off the line by Pirlo.

McLeish stuck with his single striker in the second half and the move paid off as Scotland bossed the midfield.

On 65 minutes it was all square. A McFadden free-kick was deflected into the path of Lee McCulloch, whose shot was parried by Buffon. Ferguson stabbed the ball home and the linesman's flag stayed down.

Roared on by a delirious crowd, the Scots continued to push, and 10 minutes from time Miller presented McFadden with his golden chance. But the Everton man fluffed his lines, failing to make good contact as he slid in to meet the ball.

Two minutes from the end Panucci sent a glancing header just wide, but made no mistake in injury time, heading beyond Gordon while Scotland continued to protest a ludicrous free-kick award.

The home side performed a well-deserved lap of honour after the final whistle, while fireworks were let off despite the monumental disappointment. The catalogue of heroic Scottish failure continues to grow.

Alex Chick / Eurosport