Scotland's UEFA EURO 2008 dreams were dealt a severe blow after they lost 2-0 in Georgia on Wednesday evening.

Goals from 17-year-old Levan Mchedlidze, who is at Italian Serie A side FC Empoli, and David Siradze in either half handed the hosts a deserved victory.

The result means Scotland must now win their final Group B match against World champions Italy at Hampden on 17 November to qualify for the finals in Austria and Switzerland next summer.

But they can have no complaints about the result against a young Georgia side who outclassed their guests on the night.

Scotland, in their new maroon coloured away strip, could have taken an early lead in the eighth minute when Kenny Miller's low cross found James McFadden but his shot from eight-yards could only find the side net.

In the 16th minute, however, it was Georgia who opened the scoring when a front post corner by Zurab Menteshashvili was met by 17-year-old Mchedlidze and he powered a header into the roof of the net beyond Scotland goalkeeper Craig Gordon.

The home side were visibly lifted by the goal and started to increase the pressure on Scotland, who were struggling to retain possession.

Scotland were rarely able to trouble their hosts' rearguard but in the 35th minute they were denied what appeared to be a strong penalty shout when McFadden rounded Georgi Shashiashvili only to be tripped by the defender.

German referee Knut Kircher, though, was not convinced and waved Scotland's claims away.

Georgia forced Gordon into action in the 36th minute when Mchedlidze's low drive from 25-yards required the Scotland goalkeeper to throw himself to his left to palm away.

By the break Scotland had still not been able to test Georgia's 17-year-old goalkeeper Giorgi Makaridze, who has still to play for his club side Dinamo Tbilisi.

The visitors had an opportunity to put this right in the 54th minute when they won a free-kick 25-yards from goal but Shaun Maloney curled the ball well wide of the target.

Scotland were now playing at a quicker pace without being able to create many goalscoring opportunities.

And it was Georgia who came closest to scoring the game's second goal in the 63rd minute after winning a free-kick 25-yards from goal.

Dato Kvirkvelia stepped up and struck a powerful shot which looked certain to find the net until Gordon leapt to tip over his crossbar at full-stretch.

But the hosts were not to be denied a second for long and in the 65th minute they doubled their advantage.

The ball was cut back from the byline by Kvirkvelia for Siradze to side-foot the ball low past Gordon from 10-yards.

Scotland made a double substitution, with Kris Boyd and Craig Beattie replacing Kenny Miller and Stephen Pearson, to try and get back in the match and in the 73rd minute they linked up to create an opening.

Boyd's deep cross eluded the Georgian defence and Beattie raced in unmarked at the back post only to send a looping header well over from six-yards.

Georgia goalkeeper Makaridze was finally forced into a good save in the 75th minute when he dived to his left to save McFadden's long-range free-kick.

Despite enjoying more possession in the closing stages Scotland never looked likely to find the net and it was the hosts who were celebrating a memorable result at the final whistle.