Champions League fall-out: The UEFA Cup will bring little cheer to Celtic after defeat in Lyon, writes Dominic Fifield.

The hangovers still pound relentlessly in Glasgow, though they are the legacy of desperate disappointment rather than heady celebration.

While Rangers failed to secure even UEFA Cup qualification from a Champions League campaign laced with optimism, Celtic find themselves reluctantly thrust back among Europe's second-string.

Martin O'Neill and his squad cut demoralised figures as they trudged away from Stade Gerland, having been undermined by the eagerness of the referee Urs Meier to award an 86th minute penalty in Lyon on Wednesday and by the home side's pace and invention.

The repercussions of elimination will be felt throughout the rest of their season, and not just because Neil Lennon has been reported to UEFA by the referee following an outburst on the final whistle.

The midfielder now faces sitting out the UEFA Cup third round at the very least, though he will be given the chance to respond.

"We have received the referee's report and there is a mention of Neil Lennon," confirmed a UEFA spokesperson, who added that no mention of O'Neill's or his assistant John Robertson's criticisms had been included. "A disciplinary case will now be opened where the player can submit a statement."

"The ball came over and it hit Bobo (Balde) on the arm, but the referee was desperate to give them something," growled Lennon. "I thought the referee didn't really play fair by us at all. To say we are devastated is an understatement. It is just another hard luck story for us, and I am sick of it. It is just like Seville (the UEFA Cup final) all over again. We were minutes away and we can't see it through. I've no idea why this is happening."

In truth, it boiled down to the visitors' shortcomings at the back, and particularly the lack of pace ruthlessly exploited by the French champions. Just as Porto did in May, Lyon tore at the Scots and their rearguard failed to cope.

Yet revamping this side may now be beyond O'Neill. In reaching the UEFA Cup final, a run which generated some £10 million, the Scots still registered a pre-tax loss of £5.79 million and they have debts of £17 million.

The manager was allowed to make a solitary addition to his squad in the summer, and Michael Gray only joined on a loan deal which expires at the end of the month.

Liverpool estimated that elimination at the same point last season cost them at least £7 million. While the lucrative second group stage has since been scrapped, the loss of income will still be damaging.

Those in the boardroom at Parkhead will be aware that, at some stage, O'Neill will deem he has taken his Bhoys as far as he can. There have been two Champions League campaigns under his reign and neither yielded a single away point.

With money so tight, the worry is that unfulfilled ambition could drive O'Neill away sooner rather than later.

A more imminent departure may be expected but it will be just as hard to accept. "If you score twice away from home in Europe, you should not lose the game," grumbled Henrik Larsson.

The club's majority shareholder Dermot Desmond had hoped to persuade the Swede to stay on next season if their interest in the competition had been maintained. There seems no chance of that now.

At least Celtic will be seeded for Larsson's swan song in the UEFA Cup, avoiding the likes of Liverpool, Newcastle and Inter Milan in the third round next February. It may be scant consolation but grim reality has driven the Hoops to this.

"We are still in Europe," added John Hartson. "I know it sounds crazy, but that doesn't make any of this feel any better."

Guardian Service