Down and out: Gonzalo Higuain, left, and Lassana Diarra look on shock as Real Madrid are dumped out of the Champions League Photo: AP

Real Madrid's massive summer spending was all in vain as their dream of playing the Champions League final at their Santiago Bernabeu stadium was shattered Wednesday by Lyon.

Miralem Pjanic's goal 15 minutes from time in the Spanish capital secured a 2-1 aggregate win and eliminated Real at the last 16 stage for the sixth successive season.

After spending over 250 million euros in the summer, with Ronaldo and Kaka accounting for a large part of that, expectations were high.

But Real fell short at the first knockout stage once again and now only have the league to play for.

The defeat cranks up the pressure on coach Manuel Pellegrini, who was expected to win a 10th Champions League on home turf but Real must now watch the May 22 final at their stadium on the television.

For Lyon it was a huge result as they reached the quarter-finals after exiting the competition at the last 16 stage for the past three seasons.

Left back Marcelo and midfielder Xabi Alonso were both out through suspension so Pellegrini tinkered with his line-up bringing in Alvaro Arbeloa at left back.

Veteran Guti, 33, came in as a playmaker for Alonso with Esteban Granero starting probably his most important game in a Real shirt.

Lyon started with a bank of five in midfield anchored by Jeremy Toulalan with Argentine Lisandro Lopez leading the line.

Guti had an impact after just six minutes feeding Ronaldo, who accelerated away from Lyon captain Cris before slotting a left-footed shot through the legs of Hugo Lloris giving Real a dream start.

Buoyed by the early goal Real went for the kill and should have scored again with Argentine Gonzalo Higuain the main culprit, missing a gilt-edged chance on 26 minutes.

Higuain rounded Lloris but with an empty net gaping he sidefooted against the post.

Lloris denied Higuain minutes later as the Argentine latched onto a Kaka pass only to be foiled by a strong hand from the Lyon goalkeeper.

The French visitors were second best with a Toulalan long-range effort the best they could muster in the first half.

Pellegrini wanted more of the same in the second half while Lyon coach Claude Pull was clearly angry and wanted a response from his side.

Lyon started the second period well and Maxime Gonalons, one of two second half substitutes, had a half chance for the visitors early on.

An away goal would have meant Real had to score two more goals so it was tense for the hosts especially when Iker Casillas had to make a save from Lisandro's potent lunge range shot.

Pellegrini brought off the fading Granero with Rafael van der Vaart, the hero in a 3-2 win over Sevilla at the weekend, coming on to offer more invention.

Kaka and van der Vaart had long range efforts but Lyon were more solid in the second half and threatening on the counter attack.

With a quarter of an hour left and extra-time beckoning some neat interplay allowed Pjanic to slot in meaning Real had to score two more goals.

An onslaught followed as Lyon defended for their lives but Real could not produce another comeback.

Double tops: Wayne Rooney continued his fine form with two of Manchester United's four goals against AC Milan Photo: REUTERS

They came to praise David Beckham and bury AC Milan. They came to praise Wayne Rooney and bury the Glazers. On a surreal evening at Old Trafford, the mood switching from testimonial to revolution and celebration, Manchester United cruised into the quarter-finals of the Champions League.

Good performances were seen throughout United’s team. Rooney was himself, wonderfully accomplished, a constant menace, scoring two more goals.

Milan ran into the perfect storm, a tempest blowing through them like the statues risk becoming. Beckham was emotionally received, the former United player wiping a tear away by the generosity of the welcome, but he was always going to be a sideshow. Of more interest was the stunning anti-Glazer campaign full of banners, scarves and chants.

Ferguson had deployed similar tactics to the San Siro, deputing Park to follow Milan’s deep-lying playmaker, Pirlo, and using Rooney as the lone striker, again to spectacular effect. Within 12 minutes, Rooney had scored, taking his remarkable tally of headed goals to seven in succession, all but killing the tie as a contest.

Moments in the second half, Rooney poached another, this time with his foot, and it was all over barring the shouting about the Glazers.

In scoring his first, Rooney was helped both by the exceptional quality of the delivery from Gary Neville and by the abject nature of Milan’s reaction to unfolding danger. Whatever they get up to in the famous Milan Lab, some extra work on concentration is required. When Ronaldinho failed to track back with Neville, a yard of space opened and the United captain exploited it to the full, setting the stage for Rooney’s goal.

Preferred to Rafael following the youngster’s chastening experience against Ronaldinho in Lombardy, Neville lifted over a magnificent cross, the dropping perfectly towards the penalty spot where Rooney was lurking with intent. Daniele Bonera had dozed off, gifting Rooney the freedom to make a twisting leap, powering an unstoppable header past Christian Abbiati.

Once again, Rooney’s prolific success up top for United provided further food for thought for Fabio Capello, although the England manager is adamant that Rooney will play in the hole at the World Cup. Rooney is a threat wherever he is fielded but Ferguson clearly believes he is most effective as the front man.

Rooney’s goal made it 4-2 on aggregate, meaning Milan required three.

The Italians might have scored before Rooney struck, Ronaldinho heading wide and then Klaas Jan Huntelaar’s touch letting him down badly. United withstood these early scares, plumped up their cushion through Rooney and looked utterly in control.

No Milan player was allowed to settle in possession, flashes of red dancing like fireflies around them. When Mathieu Flamini lingered on the ball, Paul Scholes came flying in with the type of lengthy run-up usually seen at the other Old Trafford. Perhaps remembering past encounters against United with Arsenal, Flamini wisely jumped out of the way.

Ferguson’s system was working well, United enjoying numbers in midfield where Scholes and Fletcher worked with their customary diligence. Fletcher even tried to enhance United’s lead, sending a shot just wide. Antonio Valencia and the left-sided Nani continued to stretch Milan.

Moments after the restart, Nani showed his threat on the counter, racing away from Ignazio Abate and then playing a sublime ball with the outside of his right foot behind Milan’s defence. Rooney scarcely had to break stride to slide the ball past Abbiati. Ferguson’s half-time instruction to “keep the tempo up’’ had certainly been heeded by the players.

The game won, United’s supporters voiced their anger at the way the American owners, the Glazer family who were present, were running their club. Twirling their green-and-gold scarves above their heads, they chanted “Love United, Hate Glazer’’ incessantly.

The atmosphere was good all evening, despite the lack of a competitive edge on the pitch. Milan could have pulled one back when Abate crossed from the right but Huntelaar headed over. United showed Milan how to finish moments later, following a Valencia dart down the right.

When he laid the ball back to Scholes, Milan’s defence was even more of a mess, ripe for the taking. Scholes rolled the ball through to Park, who promptly placed his shot from right to left past poor Abbiati.

The game then turned into a testimonial with a tearful Beckham arriving after 63 minutes, being afforded a hugely emotional reception from United fans and ironic chants of "Fergie, Fergie sign him up". Beckham, his best years long gone, looked overwhelmed by the fans’ reaction.

Ferguson removed Rooney, the footballing equivalent of declaring, confirming the game had ended as a contest.

Beckham, so used to creating chances for United in his pomp, almost fashioned another for them. Underhitting a back-pass, Beckham allowed Nani a run at goal before Milan’s defenders managed to reorganise and thwart Nani.

Beckham, who put on a green and gold scarf after the match, then displayed his more positive side, unleashing a volley that Edwin van der Sar pushed over.

Breaking off from saluting Beckham, the Stretford End then unfurled two large 'Love United Hate Glazer' banners. All the while, the percussive sound of their dissent towards the Americans was beat out, including an impassioned chant of "we want Glazer out".

There was more. Milan were so poor and United so good. When Rafael hoisted over a cross from the right, Fletcher headed home the goal his work-rate deserved.

World at his feet: with players like Kaka (left) at his disposal, Brazil coach Dunga will be expected to deliver at World Cup 2010 in South Africa Photo: REUTERS

Brazil's World Cup record: 1930 1st rd, 1934 1st rd, 1938 3rd, 1950 RU, 1954 QF, 1958 Winners, 1962 Winners, 1966 1st rd, 1970 Winners, 1974 4th, 1978 3rd, 1982 2nd rd, 1986 QF, 1990 2nd rd, 1994 Winners, 1998 RU, 2002 Winners, 2006 QF.

How Brazil qualified for World Cup 2010: South American Group, 1st.

The Coach: Dunga (Brazilian, 46). Appointed: July 2006. WC experience: Player: 1990, 1994, 1998. Coach: None.

Dunga was considered as a replacement for Vanderlei Luxemburgo in 2000 but it was not for another six years until he took charge, replacing Carlos Alberto Parreira.

The Country: Brazil are joint favourites, with Spain, to win a sixth World Cup, not that surprising given their pedigree, history and ability to continually produce outstanding players. There is a saying in football that “The English invented it, the Brazilians perfected it” and few would argue.

The “Little Canary”, as they affectionately known, are the only team to have appeared in every World Cup finals and they made sure that record would continue in the best possible fashion, beating Argentina 3-1 in Rosario.

Two goals from striker Luis Fabiano and another from defender Luisao was enough as they inflicted only the second home defeat in World Cup qualifiers on Diego Maradona's struggling side.

But it was not all plain sailing. A 0-0 draw at home to Bolivia was a low point and then they were held by Colombia in the next home tie, prompting the fans to chant “Goodbye Dunga” again.

But a coach who worked in the media during the last World Cup finals is benefiting from the form of Kaka and Robinho. In Dunga they have a man who has won the World Cup, in 1994, while they have some of the world’s most talented players. He used no fewer than 39 players during the qualification process, and the belief is that Brazil have strength in depth ahead of South Africa.

Ronaldo, a World Cup winner in 1994 and 2002, was dropped by Dunga but remains optimistic, at the age of 33, that he could still feature in South Africa, though such a recall remains doubtful.

Telegraph verdict: Rightly favourites along with Spain. Their victory in Argentina during qualifying sealed their status while coach Dunga has created a system that will be hard to beat. Brazil may not possess the attacking flair of old but it’s still evident while they are organised and will be extremely competitive and robust with pace and power.

Wanted: AC Milan have joined the chase to sign Nemanja Vidic as speculation grows that Manchester United may allow the defender to leave in the summer Photo: GETTY IMAGES

Milan are preparing to offer Dutch forward Klaas-Jan Huntelaar in a player-plus-cash deal for the Serbian defender.

Vidic, 29, who has been sidelined since December with a calf nerve problem, has emerged as Real's leading defensive target, with the Spanish club prepared to pay £20 million.

But Milan, who face United in a Champions League last-16 first-leg tie at the San Siro on Feb 16, are also determined to take advantage of persistent rumours of Vidic's desire to leave Old Trafford for the continent at the end of the season.

Although Vidic has consistently rebuffed speculation about his future at United, the club have made no moves to extend his contract, which expires in June 2012, and it is understood that the player's wife, Ana, has found it difficult to settle in the North-West.

Sir Alex Ferguson's £10 million move for Chris Smalling, the Fulham defender, last month has done little to quell the perception that Vidic will be sold and it is understood that United would be willing to part with the player for about £25 million.

Milan coach Leonardo has been told that he will be given funds to reshape his ageing squad, but the Brazilian is ready to offload Huntelaar, who has failed to settle at the club since his £14 million transfer from Real Madrid last August.

Ferguson had considered making a move for the 26 year-old, who scored 76 goals in 92 appearances for Ajax, in the summer of 2007 before settling instead on a two-year loan deal for Carlos Tévez.

Huntelaar's unproductive season at the Bernabeu, followed by his failure to impress in Milan, has since dimmed his reputation. But with doubts over the Old Trafford futures of Michael Owen and Dimitar Berbatov, Milan are hopeful that Ferguson's previous interest in the player could tempt him to take him to United in part exchange for Vidic.

Promise of great things: Kaka has played a pivotal role in Brazil's qualification campaign Photo: GETTY IMAGES

Caps: 75
Goals: 26
World Cup appearances: 6 (2002, 2006)
World Cup 2010 qualification: 11 appearances/5 goals

Club: Real Madrid, Spain
Age: 27
Position: Midfielder

This born-again Christian, and potentially the defining star of the World Cup, almost did not have a career in football at all after a swimming pool accident aged 18 threatened paralysis.

A playmaker par excellence, with a peerless economy of movement in possession, he was the subject of a world-record £91 million bid by Manchester City last summer but ended up succumbing to the allure of Real Madrid.

His role in Brazil's recent successes has been pivotal. He started his first World Cup finals in 2006, scoring in his country's opening game against Croatia.

But club demands have occasionally taken their toll, as when he was forced to drop out of the 2007 Copa America. Ominously, he was named player of the tournament in this year's Confederations Cup, which Brazil won, the curtain-raiser to the World Cup.

Frozen out: Ronaldinho has been left out of Dunga's squad for Brazil's friendly against Republic of Ireland in March. Photo: REUTERS / Giampiero Sposito

The forward, who last played for Brazil in April 2009, has produced some impressive recent performances for AC Milan and expectations had been high of a recall for the game with the Irish in March.

"Every player has chances (of a place in the squad) but at this moment he isn't part of it," Dunga said at the Brazilian Football Confederation (CBF) headquarters after naming a 22-man squad.

Robinho, who has returned to Santos on loan from Manchester City precisely to try to secure a place in the Brazil World Cup squad, was one of four forwards named in the party.

The March 2 match at Arsenal's Emirates stadium will be Brazil's first of the year after an impressive 2009 during which they finished top of the South American World Cup qualifying group and won the Confederations Cup.

Brazil, favourites to win their sixth world crown in South Africa in the finals starting on June 11, are in Group G with North Korea, Ivory Coast and Portugal.

Squad:

Goalkeepers: Julio Cesar (Inter Milan), Doni (AS Roma)

Defenders: Maicon (Inter Milan), Daniel Alves (Barcelona), Gilberto (Cruzeiro), Michel Bastos (Olympique Lyon), Lucio (Inter Milan), Luisao (Benfica), Juan (AS Roma), Thiago Silva (AC Milan)

Midfielders: Elano (Galatasaray), Felipe Melo (Juventus), Gilberto Silva (Panathinaikos), Josue (VfL Wolfsburg), Julio Baptista (AS Roma), Kaka (Real Madrid), Kleberson (Flamengo), Ramires (Benfica)

Forwards: Luis Fabiano (Sevilla), Robinho (Santos), Adriano (Flamengo), Nilmar (Villarreal)

Key men: Chelsea's Didier Drogba and Manchester United striker Wayne Rooney will play key roles in deciding who wins the Premier League title Photo: GETTY IMAGES

Chelsea (58 points currently)

Feb 27 v Manchester City (h) - The prospect of Terry v Wayne Bridge already has the tabloids salivating, but can City's fragile defence cope with Didier Drogba and Nicolas Anelka. Will Chelsea be able to handle Carlos Tevez and Emmanuel Adebayor? Prediction: Chelsea 3-0 City

March 21 v Blackburn (a) - Carlo Ancelotti's men will travel to Ewood Park for what will be a robust challenge against a Blackburn side fighting near the foot of the table. This match will test Chelsea physically, coming as it does just four days after hosting Jose Mourinho's Inter Milan at Stamford Bridge in the Champions League. Prediction: Blackburn 1-2 Chelsea

April 3 v United (a) - The contest that will play a major role in deciding the destination of the title. Heavyweight v heavyweight, Wayne Rooney v John Terry, Didier Drogba v Rio Ferdinand. Pivotal. Prediction: United 1-1 Chelsea

April 17 v Tottenham (a) - Chelsea have not won at White Hart Lane in the Premier League since Aug 2005, and will have their hands full dealing with a confident and improving Tottenham side who may still be in the hunt for a Champions League place. Prediction: Tottenham 2-1 Chelsea

May 1 v Liverpool (a) - Chelsea's penultimate match of the domestic season could barely be tougher, against a Liverpool side that may still be fighting for a Champions League spot. Prediction: Liverpool 1-2 Chelsea

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Manchester United (56 points currently)

Feb 10 v Aston VIlla (a) - With Martin O'Neill's impressive side fighting for that coveted top-four spot, United face a major test of their title credentials at Villa Park. Prediction: Villa 1-2 United

Feb 20 v Aston Villa (a) - Everton have found their feet after a difficult start to the season and will provide a stern challenge for Sir Alex Ferguson's men. In addition, the match comes just four days after United's Champions League clash at AC Milan. Prediction: Everton 1-1 United

March 21 v Liverpool (h) - Nemanja Vidic may still be having nightmares about this fixture last season, when Fernando Torres inspired Liverpool to a 4-1 victory. Rafael Benitez's men have not come close to hitting those heights this term, but this will not be a clash for the faint-hearted. Prediction: United 2-1 Liverpool

April 3 v Chelsea (h) - The contest that will play a major role in deciding the destination of the title. Heavyweight v heavyweight, Wayne Rooney v John Terry, Didier Drogba v Rio Ferdinand. This will be pivotal. Prediction: United 1-1 Chelsea

April 17 v Manchester City (a) - City, battling for a Champions League place, would like nothing more than to derail their rivals' title challenge, and will be boosted by memories of defeating United in the first leg of the Carling Cup semi-final. And should Carlos Tevez face Gary Neville, fireworks can be expected. Prediction: City 2-1 United

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Overall prediction: Should everything go to plan in their other fixtures, Chelsea would finish the season on 92 points, narrowly pipping United (88) to the title by four points. But in this season of the shock result, who can really say how many more twists and turns are ahead?