Departing coach John Connolly faces up to Australia's exit

The overwhelming favourites lost 12-10 in Marseille as Brian Ashton's side booked a meeting with France.

Coach John Connolly will step down but Australian Rugby Union chief John O'Neill has promised a full inquest.

"We were beaten by a better side and there's no point wallpapering over the cracks, it's obvious we've got a lot of work to do," said O'Neill.

The English forwards, just as they did in the World Cup final in Sydney four years ago, out-muscled and out-thought the Wallabies.

We've got a lot of challenges, from national level down to provincial level ARU chief John O'Neill

Australia have already begun recruiting new forwards coaches but O'Neill said younger players needed tuition in the intricacies of front-row play to avoid further humiliations.

"If the set-pieces aren't what they should be you can't wait until players get into the Wallabies environment to fix it. It's got to happen at a provincial level," said O'Neill.

"We've got to get on with life quickly. We've got a lot of challenges, from national level down to provincial level and we've got to take a whole company approach to the development of rugby.

"It won't happen overnight, it won't happen by talking about it. It's going to have a very rigorous, very sensible and very rational approach."

England destroyed the Australian scrum in Marseille

Australia's players were still coming to terms with their stunning defeat, with skipper Stirling Mortlock admitting the wounds will take years to heal.

"For a lot of us it really hasn't sunk in. To finish the World Cup with our worst performance is disappointing," he said.

"But I always believe you've got to take positives out of any situations.

"Two thirds of the team are extremely young. The way those guys came through this World Cup, the future is really good but our inability to play a big game is something we'll have to look at.

"This game showed there are still things we've got to work on harder. It was a massive occasion and we didn't handle it well.

606: DEBATE I thought the Aussies had improved their scrum in the last few years, but it fell to pieces against England blakjak010

"It's all part of a learning process for our younger players and they'll be a lot better for it. As disappointed as we are, you have to keep moving forward."

Meanwhile, O'Neill admits the right candidate to replace Connolly does not necessarily have to be Australian.

"We have a selection panel in place for the new coach and in early November we hope to be in a position to make a recommendation to the board," he said.

"It is a critical appointment as we start to rebuild and re-engineer Australian rugby.

"The preferred option is the best person for the job and if he was an Australian that would be a bonus."