AC Milan blamed referee Markus Merk for their Champions League semi-final defeat by Barcelona.

The disappointment is, however, likely to increase speculation about the future of Carlo Ancelotti and his squad, who must now turn their attention back to challenging for the Italian title.

Milan were furious when the German referee ruled out a 69th-minute Andriy Shevchenko headed goal during the 0-0 draw at the Nou Camp, seemingly for a push after contact with Barca defender Carles Puyol.

"It was absolutely legal. He jumped and hardly touched Puyol," said Ancelotti while club vice-president Adriano Galliani said: "It was a balanced semi-final between two great teams both of whom deserved to win -- too bad everything was decided by a refereeing error."

Barcelona went through 1-0 on aggregate.

Under Ancelotti Milan have reached three Champions League semi-finals in four seasons, winning the competition in 2003 and losing to Liverpool on penalties in last season's final.

"We once again fought at the top level in the Champions League. We arrived 90 minutes from Paris. It happens, we will try again next year," said Galliani, who runs the club on behalf of owner Silvio Berlusconi.

"Now we will plunge into the (Italian) league again knowing that we are leaving Europe with our heads held high and our fans know that too," he added.

LEAD CUT

Milan have cut Juventus's lead at the top of Serie A to three points with three games remaining and continue their bid to pip Fabio Capello's side when they host Livorno on Sunday.

Whether Juventus, who have drawn their last five games, let their grip on the title slip or not, there are likely to be changes at Milan for next season, the only question is how radical they will be.

Both Ancelotti and Galliani refused to be drawn on the plans for the close-season and, given the title race remains to be resolved, it is understandable that the club prefer to give their full backing to the squad.

But the fact that, in the absence of the injured Alessandro Nesta, Milan were forced to field 40-year-old defender Alessandro Costacurta against Barcelona indicates that reinforcements are needed.

Dutch defender Jaap Stam is leaving and, with 37-year-old captain Paolo Maldini's knee an increasing problem, the club are certain to search for a couple of younger additions to their defence.

The midfield trio of Andrea Pirlo, Gennaro Gattuso and Clarence Seedorf are likely to remain the first choices. Milan could well look to add some greater competition for places in that area, however, especially if the increasingly marginal Portuguese playmaker Rui Costa decides to leave.

The biggest question mark, though, surrounds the future of Ancelotti himself.

Spanish media continue to insist that the Milan coach is heading for Real Madrid [Images] next season although Ancelotti says this is not the case and recently signed an extension to his contract.

Changes at Real, where president Fernando Martin resigned on Wednesday, are certain to lead to a great deal of speculation about their choice of coach and it is hard to imagine Ancelotti's name not coming up again.

The Milan side is Ancelotti's creation and he shares a strong bond with the players. If he stays, change is likely to be limited but if a new man comes in then it could be a very different team next season.