[/size]
By Mike Collett
LONDON, March 8 (Reuters) - Liverpool's reign as European champions ended on Wednesday when they lost 2-0 at home to Benfica and went out of the Champions League 3-0 on aggregate.
AC Milan, the club they beat to win the European Cup in Istanbul last May, advanced to the quarter-finals with a 4-1 win over Bayern Munich for a 5-2 aggregate success.
ADVERTISEMENT
Arsenal also reached the last eight after a goalless draw with Real Madrid at Highbury for a 1-0 aggregate victory.
Olympique Lyon avenged last season's quarter-final defeat to PSV Eindhoven by crushing the Dutch side 4-0 at home for a 5-0 aggregate win to enhance their claims as the dark horses.
Benfica, Milan, Arsenal and Lyon join Barcelona, Villarreal and Juventus, who all came through on Tuesday, in the last eight, while the final first knockout round tie between Inter Milan and Ajax Amsterdam will be decided in Milan next Tuesday.
Benfica, who had lost seven of their previous eight matches in England over the years, took the lead through Simao Sabrosa who was on the verge of joining Liverpool last summer before the move stalled as they refused to match Benfica's asking price.
He curled an unstoppable shot past Liverpool keeper Pepe Reina from 20 metres after 36 minutes. Fabrizio Miccoli added a second a minute from time.
Although Liverpool battled bravely to defend their crown and hit the post twice, they could find no way back into the tie after losing 1-0 in Lisbon two weeks ago.