The English Football Association has sacked manager Steve McClaren and assistant coach Terry Venables by 'unanimous decision' after defeat to Croatia in Wembley last night ruled their side out of next summer's Euro 2008 Championships in Austria and Switzerland.

After the 12-man FA executive sat in judgement this morning a statement read:  "At a meeting this morning, The FA Board unanimously decided to terminate the contract of England Head Coach Steve McClaren with immediate effect.

The Board also terminated the contract of Assistant Coach Terry Venables."

FA Chairman Geoff Thompson said, "Like every England fan, we are all bitterly disappointed that we have failed to qualify for Euro 2008, and I know Steve feels that disappointment more than anyone.

"Of course we have no divine right to play in major tournaments, but it is quite right that qualification is expected.

"I would like to thank Steve for the work he has done since taking on the position last summer. His commitment to the job could not be questioned and I wish him the best for the future.

"The recruitment process for the new Coach begins now and we will do everything to get the right man for the job."

The statement added that there was no "timeframe for the recruitment of a new coach" but that a "root and branch" examination of the whole England set-up will be led by chief executive Brian Barwick.

McClaren refused to resign in the immediate aftermath of last night's defeat. He was contracted until 2010.  At 15 months, his tenure is the shortest of any English manager to date. England have not failed to qualify for a major tournament since 1994.

Pressed on whether there will be a change of tack in the appointment process after pressure was brought to bear to bring in an Englishman following  Sven-Goran Eriksson's exit, Barwick made it clear all candidates will be considered."I don't think nationality will be an issue," he said.

Thompson admitted the failure to qualify was embarrassing to the governing body. "Of course we feel embarrassed," he said. "As we said earlier we expect as a major nation in Europe to qualify for the European Championships and World Cups. Of course we're embarrassed, disappointed, disappointed like all fans."

Among the candidates being touted to succeeed McClaren are Irishman and Aston Villa manager Martin O'Neill, former Chelsea boss Jose Mourinho.  Another attempt may be made to prise Felipe Scolari away from Portugal after the FA were unsuccessful in their previous bid to get the Brazilian before appointing McClaren.

Another contender may well be Italian World Cup winning coach Marcelo Lippi who is available and yesterday turned down the Birmingham job.

Venables' departure could also clear the way for the Englishman to take over as coach of the Republic of Ireland.  He is known to be one of the frontrunners along with former Wigan boss Paul Jewell, but would not have been available had England qualified last night.

Speaking after the game last night McClaren said: "It is an indescribable pain. There is so much expectation, both from the fans in the stadium and the people watching on TV at home. We have let them down. We know what they are feeling - we are feeling exactly the same."

He added: "I take responsibility. Ultimately, I said judge me over 12 games. We deserve to be where we finish and we have not deserved to qualify. That is my responsibility."

Croatia coach Slaven Bilic was uncompromising in his comments after the game, stressing that his side were simply better than England and the press and public should not look for scapegoats.

The former West Ham and Everton player said: "There is nothing wrong with England football. This is by far the most difficult group. There were three teams who deserved to go through to the European Championships. You were just unlucky to get this group. I have watched all the teams and this is difficult.

"I read in the papers that no Croatian player would start in your team. That's ridiculous. Wake up.

"I love your players. They are jumbo jets of football but we are players in a small country who can play good football. We have players with great skill and good lungs."