By Tom Allnutt, Press Association Sport

Stuart Lancaster insists England's World Cup dream is not yet dead despite their devastating defeat to Wales at Twickenham.

England led 16-9 at half-time and then stretched the advantage to 10 points in the second half, but a late try from Gareth Davies and a Dan Biggar penalty six minutes from time sealed a stunning Welsh victory.

The result puts Wales firmly in charge of Pool A while realistically England must now beat Australia next Saturday to avoid a nightmare exit before the quarter-finals.

"There's no doubt it's knock-out rugby," Lancaster said.

"Wales have to go and play Fiji and have still got to play Australia but yes, arguably Australia is the knock-out stage for us now.

"Two teams go through from the pool and teams in the past have lost in the pool and gone through to the final.

"I said to the boys in the changing room, everything has to now go into beating Australia."

The defeat comes as a crushing blow to England, who dominated large spells of the contest but were simply unable to finish their opponents off.

Jonny May's first-half try had put the hosts in the driving seat but indiscipline at the breakdown continually allowed Wales to stay in touch.

Owen Farrell, a surprise selection at fly-half ahead of George Ford, kicked 20 points during the match but England chose not to kick a late penalty after Wales had taken the lead.

The three points could have sealed a valuable draw but captain Chris Robshaw instead opted for a line-out in the hope of scoring a match-winning try.

"That call comes down to myself," Robshaw said.

"We spoke to the kickers on the pitch and we decided we wanted to go for the win.

"The two line-outs before we had good ascendancy in the driving but unfortunately it didn't come off there.

"It was a tough kick, we weighed up the options, we wanted to go for the win.

"It didn't work and now it's about the character of the squad. It hurts like hell at the moment."