England 2 Croatia 3
England played a game of brinksmanship just once too often and, on a night of high drama, failed to qualify for the 2008 European Championships after falling miserably short against Croatia.
Instead, it is Russia who join Croatia in Austria and Switzerland next June.
England threatened a dramatic recovery in the second half when, after trailing by two goals at half-time, they scored through Frank Lampard and Peter Crouch to pull the scores level. But a superlative goal by Mladen Petric in the 77th minute gave Croatia a victory they deserved.
With Croatia already through to the finals, England only needed a draw to join them. David Beckham, who inspired the recovery after coming on as a substitute, has surely played his final international match.
For all the excitement of that mini-revival early in the second half, it should not be forgotten that England were outmanouevred by a classier team, one that clearly relished the chance to defeat England at Wembley.
The only surprise in McClaren's line-up was that there were no surprises. It was widely expected that Scott Carson, the Aston Villa goalkeeper on loan from Liverpool, would replace Paul Robinson, and that Shaun Wright-Phillips would be preferred on the right of midfield to Beckham.
With Crouch occupying the lone position upfront and a midfield packed with Steven Gerrard, Gareth Barry and Frank Lampard, McClaren gambled with a cautious 4-5-1 formation, despite his protestations that it was actually a 4-3-3 formation.
It was not so much the quality of the England team that worried Croatia as the state of the Wembley pitch. Even before the torrential downpour last night, Slaven Bilic, the Croatia head coach, was lamenting the inadequacies of the surface. Once the rain came, the pitch resembled a marsh.
England allowed Croatia time and space in midfield and Croatia, playing without fear, took advantage with a moment of opportunism that is sure to haunt Carson for the rest of his career.
The shot by Niko Kranjcar from 23 yards in the seventh minute was not particularly fierce or testing but it skidded off the surface and, inexplicably, through the England goalkeeper.
England's response was to attack with purpose and Stipe Pletikosa, the Croatia goalkeeper, made point-blank saves from Shaun Wright-Phillips and Crouch.
Pletikosa's interventions seemed doubly important when, in the 13th minute, Croatia scored a second goal. And this time, while the England defenders appeared frozen in the act of collapse, there was something wonderfully artistic about the angled pass by Eduardo that allowed Ivica Olic to skip past Carson and prod the ball home.
It was Croatia's intelligence that was telling. They were comfortable sitting back and adept at breaking forward. England, who could easily have conceded further goals in a wretched first half, did not even have the spirit to counter Croatia's beautiful triangles in midfield.
In what was essentially an admission of a previous error, McClaren made key changes at half-time, bringing on Beckham in place of Wright-Phillips and Jermaine Defoe, a striker, in place of Villa's Barry.
The change in attitude was significant. The pace increased, the atmosphere improved and England sensed an optimism that had been missing since the opening five minutes.
When Dario Simunic fouled Defoe inside the penalty area in the 56th minute, there was a feeling of inevitability. Lampard scored the penalty and, in an instant, the complexion of the match changed.
But still there was the feeling that Croatia were superior. They forced Joleon Lescott into an error that saw him hit his own crossbar with a miscued clearance and then, from the resulting corner, were denied when Carson saved at point blank.
England were defending badly, with Wayne Bridge at left back particularly vulnerable but still, there was always Beckham.
With Croatia losing their shape for the first time in the match, his deft cross from the right in the 65th minute found Crouch, who controlled the ball with his chest and volleyed home from close range. This was not the England of the first half; this was a new, confident outfit.
And then came reality. Intoxicated by their own revival, England went to sleep in their own half. Allowing Petric too much space on the outside of the penalty area in the 77th minute, the Croatia substitute scored with a low shot that curled into the far corner of the goal.
Scorers: Kranjcar (7), 0-1; Olic (13), 0-2; Lampard (57, penalty), 1-2; Crouch (65), 2-2; Petric (77), 2-3. ENGLAND (4-5-1): Carson; Richards, Lescott, Campbell, Bridge; Wright-Phillips (Beckham, 46), Gerrard, Barry (Defoe, 46), Lampard, J Cole (Bent, 80); Crouch. Substitutes: A Cole, James, Brown, Hargreaves, Bent. CROATIA (4-4-2): Pletikosa; Corluka, Simic, Robert Kovac, Simunic; Srna, Modric, Nico Kovac, Kranjcar (Pranjic, 75); Olic (Rakitic, 84), Eduardo (Petric, 69). Substitutes: Runje, Babic, Knezevic, Leko.
Referee: Peter Frojdfeldt (Sweden).
Bookings: Croatia - Kovac, Eduardo (fouls). Attendance: 88,091.