McClaren under threat as Wolfsburg crash in cup

Steve McClaren's position as manager of Wolfsburg was looking perilous last night as his struggling side were knocked out of the German Cup 3-1 by the Bundesliga 2 side Energie Cottbus.

"It was just not good enough today; it was not good enough throughout the whole first half of the season," McClaren admitted. "I am disappointed and frustrated. We have hit bottom. The club needs changes now. No one knows what will happen in the next days."

Ominously for the former England manager, the Wolfsburg general manager Dieter Hoeness said: "This result has turned the holidays upside down. But I will not act without considerable thought."

With a European place on offer to the cup winners, Wolfsburg fielded a strong side but were 3-0 down at half-time when their fans started jeering and chanting: "We have had enough". Edin Dzeko pulled a goal back in the second half.

Earlier in the day McClaren suggested that Dzeko could be leaving next month for Manchester City. However, Dzeko himself said he was not, though he followed that statement by expressing his desire to play in the Champions League.

"He is a world-class striker," McClaren said. "But we are in the football business and nothing is 100 per cent sure." Dzeko, however, said that a move was out of his hands and not imminent. "That is up to Wolfsburg," said the 24-year-old. "But at the moment it looks like I am staying."

The club are keen to hold on to the player and it was reported last night that Wolfsburg have set a prohibitive £38m price tag on him. City manager Roberto Mancini remains eager to recruit a new striker, and Dzeko is on top of his wish-list.