Rio Ferdinand , Wayne Rooney and Patrice Evra of Manchester United walks dejected after Basel scored their second goal during the UEFA Champions League Group C match between FC Basel 1893 and Manchester United at St. Jakob-Park on December 7, 2011 in Basel, Switzerland.

English Premier League superpowers Manchester United and Manchester City crashed out of the Champions League yesterday as French side Lyon achieved a seven-goal miracle to reach the last 16.

United, the European champions in 1968, 1999 and 2008, slumped to a shock 2-1 defeat at Basel, a defeat which allowed the Swiss champions to go through from Group C with Benfica.

City defeated Group A winners Bayern Munich 2-0 but lost out on a last 16 spot when Napoli saw off pointless Villarreal 2-0 in Spain.

It was only the third time in 16 years that Sir Alex Fergusuon's United had crashed at the group phase with Wednesday's shocker coming six years to the day since they last bade farewell at the first round, following a 2-1 loss at Benfica.

Despite needing just a point to go through, last year's beaten finalists were undone by goals in each half from Marco Streller and Alexander Frei which condemned Ferguson's side to their first away defeat in the opening round in five years.

Phil Jones' late goal gave them a glimmer of hope but Basel soaked up waves of United pressure -- and rode their luck -- to book their place in the last 16 for the first time since 2002-03.

For United, who have played in three of the last four finals, there is now the unwelcome consolation of the Europa League.

Defeat only added to striker Wayne Rooney's problems, with the loss coming a day before he appeals against a three-match ban which could rule him out of Euro 2012.

"Of course we're disappointed, there's no other way you can feel," said Ferguson.

"It's part of football. You have to deal with the disappointment, and this club has used it as motivation many times."

Basel coach Heiko Vogel, who only took over from Thorsten Fink in October, was overjoyed.

"It's a sensation, yes, because it's not every day you beat Manchester United," he said.