Writing off any side managed by Martin O'Neill is always a dangerous game but, from a position of strength, Celtic's hopes of qualifying for the second group phase were considerably weakened here in Portugal last night.

Seldom under O'Neill's tenure can Celtic have suffered such a torrid evening and, having been perched defiantly on top of Group E, the likelihood now is that, if they are to qualify, it will have to be through the back door rather than the front entrance.

To say Porto were exhilarating would be an understatement. Some of their football was breathtaking in its audacity. They scored twice before half-time, added a third on the hour and generally caused mayhem every time they attacked with purpose.

It was a night, therefore, that Celtic will want to forget. Battered and beleaguered, O'Neill and his players will retreat to lick their wounds. But a vast improvement will be needed in their final two games, in Rosenborg next Tuesday and home to Juventus on Hallowe'en, if this is not to become a brief and undistinguished entry in the competition.

Only Manchester United, Bayern Munich and Real Madrid have been involved in more Champions League games than Porto, this being their 57th appearance on the Continent's top table compared to just four for O'Neill's novices.

This was their first visit to Estadio Das Antas, one of the principal venues for Euro 2004, and around 4,000 of their raucous fans were inside this sweeping old stadium to support them, not to mention a similar number without tickets outside.

Given Celtic's lofty position after winning their two games in Glasgow, O'Neill had placed the emphasis beforehand on avoiding defeat. So to concede a goal before the first minute had elapsed was careless in the extreme.

At this level Celtic will learn a painful lesson if they do not eradicate the slack defending that, first of all, permitted Capucho to swing a deep cross over from the right and, secondly, afforded space for Ferreira Cruz Clayton to have the luxury of a free header on goal. It was a gift the Brazilian gratefully accepted, beating Robert Douglas for power and precision to the goalkeeper's right.

Celtic's sluggish start was as surprising as it was disappointing, and Porto, an intoxicating blend of European know-how and South American flair, almost capitalised again on 15 minutes.

Again, Celtic were culpable of some unusually poor defending, and even though Pena aimed narrowly wide, having evaded three tepid challenges, the ease with which he manufactured the shot will have given O'Neill kittens.

At that stage Celtic looked woefully short and it was a miracle in itself, such was Porto's domination that they lasted until first-half stoppage time before Mario Silva, 30 yards out and aiming through a sea of players, made it 2-0 with a shot of stunning power and accuracy.

O'Neill could be excused for wondering what might have been if Henrik Larsson, of all people, had not squandered a free header from Alan Thompson's corner just a few minutes earlier.

Yet it could not be argued that the score flattered Porto. Larsson was a peripheral figure while John Hartson, making his Champions League debut, was a substitution waiting to happen.

The frequency with which Porto were bearing down on Celtic's goal made further damage almost inevitable, and, on the hour, it duly arrived. For the umpteenth time Celtic were carved wide open and Clayton emphasised the hosts' superiority by lashing in an unstoppable shot off the underside of the crossbar.

Deco then tried an audacious chip in the 68th minute and Douglas had to make up the ground to save.

Celtic looked like conceding more goals and Capucho should have tested Douglas, but he failed to connect properly with Clayton's cross in the 72nd minute.

Douglas did well to save Deco's last-minute effort, but the damage was already done.

PORTO: Ovchinnikov; Ibarra, Ricardo Carvalho, Andrade, Mario Silva; Costinha (Fredrick, 80min), Paredes, Capucho (Paulo Costa, 85), Clayton (Rubens Junior, 72); Deco; Pena.

CELTIC: Douglas; Balde, Mjallby, Valgaeren; Agathe, Lambert, Lennon, Petrov (Sylla, 65), Thompson (Moravcik, 56); Hartson (Maloney, 86), Larsson.

Referee: R Temmink (Netherlands).