Benfica 2 Manchester United 1: United sink into Europe's outer darkness after 10 years in light

In a grimly logical conclusion to what became the "group of dearth" for Manchester United and Sir Alex Ferguson, the scene of one of the club's greatest performances in European football turned into the stadium of blight last night.

Defeat in the Estadio da Luz by Benfica ­ after United had taken an early lead through Paul Scholes ­ condemned Ferguson's side to an expensive exit from the Champions' League at the group stage for the first time in a decade.

The lead was short-lived, the Portuguese champions equalising through one of their four Brazilians, Geovanni, and the United manager's worst fears loomed into focus when Beto's drive deviated home off Scholes.

News of a late goal for Villarreal against Lille coincided with a flurry of substitutions by Ferguson, and the section was so tightly contested that a second goal for United would have seen them advance to the knockout phase as runners-up.

Instead, United finished bottom with just three goals to show for six matches, and without even the questionable consolation of a Uefa Cup spot. They could not complain. True, they faced wall-to-wall negativity in the three home games, but showed too few ideas about how to break down obdurate opponents. Here, they could not maintain the initiative, giving away the ball carelessly and frequently, and their efforts to retrieve it were increasingly desperate.

"It is a low moment but part of your job is to recover from this," Ferguson said.

For United's American owners, the Glazer family, elimination will be costly, and it remains to be seen whether their reaction has darker implications for Ferguson's job security after 19 trophy-laden years at Old Trafford. United would have banked £2.5m from the next round alone, and up to £15m if the team had reached the final. Now, rather than dreaming of a trip to Paris in May, United are free to concentrate on chasing Chelsea in the Premier eague and on avoiding a banana skin called Burton Albion in the third round of the FA Cup.

Ferguson had hoped that United could honour the memory of George Best by repeating their epic victory of 1966, even if another 5-1 win was the stuff of fantasy. Best had disobeyed Sir Matt Busby's instruction to "keep it tight for 20 minutes", blowing through Benfica's defences like a whirlwind to score twice in the first 12 minutes.

When United went ahead after only six minutes, the scenario did not seem so far-fetched. Ferguson had gone for experience, starting Gary Neville and Ryan Giggs despite their lack of first-team combat, and he must have felt vindicated when the pair combined to set up the opening goal.

Giggs, in a central position, swept a long pass to the unmarked Neville on the right, where United's new captain had time to look up and measure his cross. Scholes almost walked the ball in, although for a tantalising moment it looked as if it would stick between his legs.

It was no majestic slalom, à la Best, but for Scholes, who had scored his first goal of the season only last weekend, the effect was similar. Benfica looked flustered, but within 10 minutes the scores were level. Again the danger emanated from the right, Nelson crossing for Geovanni, in regal isolation, to dive and head in.

Cristiano Ronaldo had hoped, somewhat naïvely, for a warm reception from his compatriots. In the event, his every touch provoked whistles of contempt. The disdain reached new levels of shrillness after he kicked Beto midway through the first half, earning a yellow card.

After the phoney war of virtually all the previous games in the group, what we now had resembled an British cup tie. Both sides attacked in swarms, Scholes almost restoring United's lead with a 25-yard volley that Quim in the Benfica goal touched over athletically.

When the retired England forward did find the net again after 34 minutes, however, it was not the way he wanted. Nelson's centre was headed away by Alan Smith, but only as far as Beto. When the midfielder took aim from 20 yards, the ball clipped Scholes on its way past Edwin van der Sar. Suddenly, United looked horribly stretched, and they promptly survived a plausible penalty appeal as Geovanni fell under Mikaël Silvestre's challenge.

After all the talk of Wayne Rooney donning Best's mantle, he struggled to have any impact. Strikers tend to be as good the service they receive, but the early promise of Giggs and Ronaldo faded while Smith and Scholes in the centre of midfield seldom showed the invention to complement their industry.

At the back, too, United were often ragged, conceding needless fouls and playing each other into trouble, with Rio Ferdinand having one of those games when his mind seems to be elsewhere.

In the 58th minute, however, a neat build-up involving Scholes and Ruud van Nistelrooy led to the ball being laid off to Ronaldo, only for the boyhood Benfica fan to roll his shot across goal and wide.

It was supposed to be United, watched by Sir Bobby Charlton, Alex Stepney and Pat Crerand from Best's heyday, who recreated the 1960s. What transpired was a triumphalist Benfica crowd reliving the same era, when Eusebio and co regularly reached the European Cup final.

The introduction of Louis Saha and Park Ji-Sung for Giggs and Ronaldo was the signal that United would go all out for the goal that might just be enough, especially with Diego Forlan's Villarreal obliging with a 1-0 win against Lille, to take them through to the last 16.

It was not to be ­ and the fall-out promises to be darkly compelling

Benfica (4-2-3-1): Quim; Alcides, Anderson, Luisao, Leo (Rocha, 89); Beto, Petit; Nuno Assis (Pereira, 72), Nelson, Geovanni (Mantorras, 80); Nuno Gomes. Substitutes not used: Nereu (gk), Aguiar, Dos Santos, Roque.

Manchester United (4-4-2): Van der Sar; Neville, Ferdinand, Silvestre, O'Shea (Richardson, 85); Ronaldo (Park, 67), Smith, Scholes, Giggs (Saha, 60); Rooney, Van Nistelrooy. Substitutes not used: Howard (gk), Brown, Fletcher, Bardsley.

Referee: K Vassaras (Greece).