Stuart Lancaster: We needed to take the opportunities we created

A Manu Tuilagi try and three Toby Flood penalties saw England lead 14-11 at half-time at Twickenham before full-back Berrick Barnes kicked three second-half penalties to wrest back the Cook Cup for the Aussies, who bounced back from their thrashing by France last weekend in some style.

The defeat could have long-term significance as it means England, currently ranked fifth in the world, are now unlikely to earn a top seeding for the World Cup on home soil in 2015.

Lancaster said: "I'm disappointed we lost but I thought Australia played a smart game and bounced back from their defeat against France last week and were competitive in all areas.

"There were lots of positives from our own performance but the reality is we needed to take the opportunities we created, especially in the last 20 minutes when we thought our tempo would pay.

"They are the lessons we have to learn for South Africa next week."

Some of those opportunities were squandered when England twice took decisions in the second half to tap and go or kick for touch with penalties rather than kick for goal.

However, Lancaster backed his players.

He said: "We'll look at every decision but with the momentum at the time I thought it was the right decision. You back your players on the field. The momentum was with us and I thought from there we were going to score a try.

"If we are going to give players the confidence to go out and play then we have to back them.

"We have areas to work on, but there was lots of intent to play. It was just little bits of execution towards the end of each phase that put us under pressure."

Australia scored the game's first try through wing Nick Cummins, who finished off a scything move with aplomb for his first international touchdown.

Barnes added a drop goal and a penalty in the first half and England's fate might have been different if number eight Thomas Waldrom had not spilled the ball in the act of touching down.

Lancaster, however, was upbeat, believing his players can turn things around for their encounter against South Africa next weekend.

"They are all must-win games," he admitted. "We're devastated to have lost this game. We didn't quite take our opportunities and at this level we must take it. They managed the breakdown better."

Asked if seven days was enough time to put things right, Lancaster added: "Of course it is. Every game's a new game. You learn, review and move on.

"We have got to be better. Australia proved in their 18-18 draw with New Zealand they can put out a performance at the top end and they have done that today.

"We'll look at the tape and talk it through, train and learn our lessons."

England defence coach Andy Farrell was also impressed with the Australian performance.

He said: "Australia played a very smart game. Their attack was good and asked a lot of questions. We weathered the storm but theirs was a messy breakdown and penalties and it was stop-start.

"But all round you have to take your hat off to Australia. They didn't look desperate, they looked controlled."