The Wallabies' hopes of winning the 2007 IRB Rugby World Cup are finished after losing 12-10 to England in their quarter-final at Stade Velodrome in Marseille.

The rugged English forwards steamrolled the Wallabies pack in the scrums and at the breakdown to lay the platform for a tense 12-10 win in Marseille.

Loose-head prop Andy Sheridan, Australia's Twickenham tormentor in 2005, again led the destruction up front as the defending champions came back from 10-6 down at half-time.

Jonny Wilkinson, who kicked four penalties from seven attempts, slotted the last of his goals in the 60th minute to give England the lead.

Try as they might, the Wallabies failed to find any rhythm or phase continuity to hit back although skipper Stirling Mortlock narrowly missed a late monster penalty attempt.

From 47m, wide out, Mortlock's kick just sailed past the left upright with two minutes left.

The final whistle saw many distraught Wallabies collapse onto the turf in tears.

"It was our worst performance (of the tournament)," Connolly said.

"England's scrum got into strides. England controlled the breakdown really strongly and from that we never got any momentum.

"The game never really got off the ground. England didn't really looked like scoring.

"We looked dangerous at times but at no stage did we control the breakdown in any shape or form.

"A lot of the ball we got was on the back foot and when we did get a bit ball of ball on the front foot we looked dangerous."

Australia also failed to cope with the intense pressure on a hot day in front of 59,102 at Marseille's famed 'bull ring'

"We lost a fair bit of composure at times," Connolly admitted.

"We had chances to do things and we were flustered and made uncharacteristic errors, things that we pride ourselves on not doing."

For Connolly, retiring as national coach, it was his worst nightmare after fearing England's set-piece game and Wilkinson's left boot.

Wilkinson could have made the Wallabies pay more but them off the hook with three missed penalties and two failed drop goal attempts.

A bitterly disappointed Mortlock also had a less-than-happy day with the boot, kicking two from five.

"Personally, obviously goal-kicking-wise, I'm very disappointed," he said. "I should've kicked them.

"It's an extremely quiet, dull change room at the moment. They're extremely disappointed with the way we played today. But credit goes to England with their breakdown."

The Wallabies scored the only try - through Lote Tuqiri - but that was little consolation for coach Connolly as the loss equalled Australia's poorest result at a World Cup.

It was also England who sent Australia packing during the quarter-final stages in 1995 at Cape Town.

For the eight members of the Wallabies team which lost the 2003 extra-time final 20-17 to England, the latest defeat was even more painful.

It was the last Test for veteran halfback George Gregan, who had an unhappy time at the base of a fiercely-contested ruck, and also meant long-time halves partner Stephen Larkham wouldn't get the chance to return from injury.

Too often Australia kicked for field position when they had opportunities to attack in the second half.

The times they made half-breaks the support play wasn't there to finish off as the English defence scrambled brilliantly and also counter-rucked ferociously.

The result put England through to a semi-final in Paris next Saturday against France, who defeated New Zealand 20-18 in their quarter-final in Cardiff.

AAP