The Year in Review: South African World Cup 2010

England nil. Spain won.

Among the worn-out, deflated group of England's 2018 bid team who dragged themselves through Zurich airport on their way home the day after their crushing defeat earlier this month was the spry, bespectacled figure of the 64-year-old Fabio Capello.

Capello had gone to Switzerland with the rest of the big hitters, including David Beckham and Prince William, as part of the final, doomed drive to persuade Fifa to vote for an English World Cup in 2018. But unlike the others, no one had seen Capello in the English bid's presentations and glad-handing. He had been the bid's equivalent of an unused substitute.

One year earlier, it would have been hard to imagine quite how low Capello's star would sink in England. In December last year, he was the all-conquering, purposeful Italian who had qualified for the World Cup Finals with confident ease. The England team had won nine games out of 10 in qualifying and their only defeat – to Ukraine – had come when the side had already secured their place in South Africa.

Capello had never been more popular than the day after England's 5-1 victory over Croatia in September 2009 at Wembley. It was the game that clinched qualification. But it was significant for other reasons, too. The bright young Croatian team had defeated Steve McClaren's England at Wembley two years earlier, denying them a place at the 2008 European Championships.

With Capello in charge Croatia had been beaten in Zagreb and at Wembley, and English football felt like it was back in charge again. "Get De Beers in", proclaimed the front page of The Sun that morning. "We're going Tutu South Africa".

Against normal protocol, the Football Association arranged a press conference at the Royal Lancaster hotel the day after the game. Capello announced that he was banning WAGs from England World Cup headquarters. In the press, we swooned. At last – a manager who laid down the law.

Quite where it all went so badly wrong for Capello in 2010 is still something of a mystery, even to the man himself. The crushing failure of the England team in South Africa – two dismal performances out of three in the group games, then humiliated 4-1 by Germany in the first knockout round – was a brutal experience for the game in this country. Five months on and we are nowhere near recovering.

For those of us who were there over those dismal 26 days in the dusty town of Bafokeng in South Africa's North West province, where the team was based, the questions from friends are always the same: Why? Why were England so bad? Why did a group of talented players who turn it on every week in the Premier League fail so calamitously?

No one reason explains it all, although over the weeks and months, certain explanations have crystallised. Capello misjudged the tiredness of the players. They were overworked in a pre-tournament base at altitude in Austria. He failed to recognise that the 4-4-2 formation he clung to with such grim determination was outmoded against 4-2-3-1, the new system du jour, employed with such effectiveness by the Germans.

John Terry, sacked as captain by Capello in February when a media storm erupted over his alleged affair with the ex-fiancée of former Chelsea and England teammate Wayne Bridge, did not help matters. He is still one of the squad's most talented players but he was undoubtedly a disruptive influence.

Wayne Rooney, England's star and a potential World Cup great, failed to recapture the form that he had enjoyed for Manchester United and England before his ankle injury at the end of March. For the second successive World Cup, Rooney turned up half-fit and left having disappointed everyone.

And, critically, the mood in England's isolated, lonely training camp was miserable. For the outcry over the WAGs in Baden-Baden, the town near to England's swanky World Cup base at the 2006 World Cup in Germany, it now seems, ironically, that in South Africa they would have been better off in Johannesburg or Cape Town with the whole celebrity caravan hitched on for the ride.

Even in February, Capello was still being lauded. His decision to sack Terry after the FA dithered was hailed by the Daily Mail front-page headline "Grazie, Signor Capello", which pointed out that it had taken an "Italian family man" to remind the FA of the morality Middle England expected of its public figures.

When did the warning signs begin? David Beckham's Achilles tendon injury in March was sad for him but it was not a body blow to England that he would miss the World Cup. But the news over Rooney was disastrous. Then Manchester City midfielder and Capello stalwart Gareth Barry tore ankle ligaments in early May and suddenly the squad had a jinxed feel to it.

Capello started showing worrying signs of a lack of personal judgement. His launch of the "Capello Index" on the eve of the announcement of his provisional 30-man squad was a mistake. He had to back down. He tried to talk Paul Scholes out of international retirement, having been successful with Jamie Carragher. But what did that say about his faith in his existing squad?

Leaving out Theo Walcott was defensible based on his form at the time. Losing Rio Ferdinand to injury was plain unlucky. So too was the mistake by goalkeeper Rob Green which gifted the United States an equaliser in England's opening game. But it was Capello who picked Green. And he has not picked him since.

Only after England's second game – a stultifying 0-0 draw in Cape Town against Algeria – did things get really interesting. Two days after the game, Terry gave a press conference that came to define the whole joyless mission.

He began with what seemed like an endorsement of Capello, who was by then under serious pressure. But by the end, Terry was promising to face Capello down at that evening's team meeting. "If it upsets him [Capello] then I'm on the verge of just saying: 'You know what? So what?' I'm here to win it for England."

At first, it looked as if Terry was leading a player revolt. Then, it became clear that he did not have the backing of his teammates, or Steven Gerrard, the captain in Ferdinand's absence. Some felt Terry was simply saying what he thought the public back home wanted to hear. What was certain was that he did not confront Capello that night. He was warned off by one of Capello's staff. Others pointed out that Terry had a history of not speaking his mind at team meetings.

In the days before the game against Slovenia, which England won 1-0, ensuring they progressed to the second round as group runners-up to the US, Terry apologised. Capello said that Terry had made "a big mistake". But the enduring sense was that the camp was divided. There was Terry; then there was a grumbling, dissatisfied squad; and, finally, a manager who seemed to be losing the belief of his players.

Next, England were up against a brilliant young Germany team. At 2-1 down in the first half, the Uruguayan referee, Jorge Larrionda, and his linesman Mauricio Espinosa failed to see that Frank Lampard's shot had crossed the line. Deflated, stretched and without tactical inspiration from Capello, England lost 4-1.

Germany's tournament was to end in the semi-finals, but not before one further scintillating performance, a 4-0 victory over Argentina. Spain, the pre-tournament favourites, had started even more poorly than England, losing their opening game, before recovering their composure and assured style. They were too good, and too experienced, for Germany, and then held their nerve in a fractious final against the Dutch to add the world trophy to the European crown they already held.

For England, the fallout has been severe. Capello came close to losing his job and even now is something of a lame duck. His team won their first two Euro 2012 qualifiers but they drew with Montenegro at Wembley in October, and anything but victory against Wales in Cardiff in March will set alarm bells ringing at the FA. And as if English football did not have enough to despair about, the 2018 bid, which garnered just one foreign Fifa executive committee bid, capped it all.

There are signs that in the likes of Jack Wilshere, Josh McEachran and Jack Rodwell – and a few others – there is a new England team on the horizon. As for Capello, he will leave after Euro 2012, and it might even be sooner, with Inter Milan interested in his services. 2010 was supposed to be Fabio's year. But even he, with his great coaching CV of trophies and success, could not solve England's culture of failure.