Champions out but Milan keep eye on the prize

LONDON, Mar 9 (Reuters) Liverpool's reign as European champions ended when they lost 2-0 at home to Benfica and tumbled out of the Champions League.

Liverpool, the five-times champions, lost 3-0 on aggregate and were followed through the exit door by nine-times winners Real Madrid who drew 0-0 at Arsenal but lost 1-0 over two legs.

Six-times champions AC Milan did reach the quarter-finals after crushing four-times winners Bayern Munich 4-1 at the San Siro for a 5-2 aggregate win.

Yesterday's result meant more pain for the Germans at the hands of Italian opposition after Werder Bremen were knocked out of the competition by Juventus on Tuesday and the national side were thumped 4-1 by Italy in last week's friendly in Florence.

Olympique Lyon, managed by former Liverpool boss Gerard Houllier, remain the competition's dark horses after an emphatic 4-0 home win over PSV Eindhoven.

The Dutch side played the second half with 10 men after skipper Philip Cocu was sent off after picking up two yellow cards inside 42 minutes.

Lyon went through 5-0 on aggregate to avenge last season's quarter-final defeat to PSV with Tiago scoring twice and Sylvain Wiltord and Fred adding the others.

SIMAO STRIKES Benfica went to Anfield having lost seven of their eight matches in England over the years but doubled their 1-0 lead from the first leg after 36 minutes through Simao Sabrosa.

He was on the verge of joining Liverpool last summer before the move stalled when they refused to match Benfica's asking price of 11 million pounds (.13 million).

The winger showed the Anfield crowd a glimpse of what they were missing when he curled an unstoppable shot past Liverpool goalkeeper Pepe Reina from 20 metres.

Substitute Fabrizio Miccoli added a second a minute from time with a close-range bicycle kick that sent the holders crashing out of the competition.

Although Liverpool battled bravely to defend their crown and hit the post twice, they failed to score for a fourth successive Champions League match as their 14-game campaign, which began in the first qualifying round last July, ended in a shattering anti-climax.

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