By Nick Bryant BBC News, Sydney

Australia were strongly tipped to beat world champions England

There have been two major shocks in the Rugby World Cup with England beating Australia and France, the host nation, beating New Zealand.

The southern hemisphere teams were expected to dominate the tournament.

Instead the northern hemisphere has hit back and the south is in shock, with tears on both sides of the Tasman Sea.

For rugby-obsessed New Zealand, this is nothing short of a national disaster, as the All Blacks went into the tournament as overwhelming favourites.

They have been dominant for the past three years and were confident of lifting the World Cup for the first time since hosting the inaugural tournament way back in 1987.

To fail again and in the quarter final is a colossal underachievement.

Broken dreams

After watching the game in Cardiff, the country's Prime Minister Helen Clark wore a brave smile as she congratulated the French President Nicolas Sarkozy.

But she knows her country will be in mourning.

New Zealand have been the best team in the world for three years

Its rugby team has long been the target of Kiwi national ambitions and a symbol of national unity.

For Australia too, abject misery - beaten by England, the old enemy.

The Wallabies had hoped to avenge their defeat in the 2003 World Cup final.

They were clear favourites to do so. But they once again fell victim to the boot of England's star player Jonny Wilkinson, who kicked the world champions to victory as he did four years ago.

In this part of the world there had been heady talk of an all-southern hemisphere final four involving Australia, New Zealand, South Africa and Argentina.

Their teams were thought to be faster, stronger and more adventurous.