Fans in tears as European glory eludes Liverpool

LIVERPOOL, England, May 24 (Reuters) Liverpool fans wept and then stood proudly defiant after their team, unable to repeat their 2005 triumph over AC Milan, lost to the Italians in the Champions League final in Athens.

In bars in the centre of the northern English city, fans held aloft flags and scarves and sang their traditional anthem ''You'll Never Walk Alone'' after Liverpool went down 2-1 despite creating most of the chances at the Olympic Stadium.

Red-shirted supporters cried as they sang while their team's players collected runners-up medals at the end of the match.

''We played so well but it just wasn't enough,'' student Lucy Holland-Rathmill said after the game.

Briefly, it seemed a repeat of Liverpool's stunning 2005 comeback -- when they scored three goals in the second half and beat Milan on penalties in Istanbul -- might be possible as Dirk Kuyt scored to make it 2-1 in the 89th minute.

But this time the Italians, who had no doubt learned their lesson, held on to win their seventh European Cup.

''I am gutted but I am also very proud,'' said web designer Chris Dennett, aged 28, speaking above the din in Aldo's, a city centre bar owned by former Liverpool striker John Aldridge.

''All that went wrong is that in the last half hour we looked tired but I'm not going to blame them (the players),'' he added.

Dejected fans sat on the kerbside, singing into their flags.

''We didn't deserve to go down 1-0 at halftime,'' said Liverpool supporter Damian Rogers after striker Filippo Inzaghi deflected the ball past Liverpool keeper Pepe Reina just before the break. ''AC Milan didn't have many attacks worth mentioning.'' Before the match, fans had thronged the city centre's pubs and bars, many wearing Steven Gerrard masks handed out by a local newspaper and being photographed in the sunshine by bemused tourists.

Business manager Chris Burt, 50, said he had travelled up from Dorset in southern England to see the game.

''There's always an element of luck and in the end Milan were the better side,'' he said after Inzaghi's goals in the 45th and 82nd minutes secured victory for Milan.

REUTERS DKS PM0459