Kenny Dalglish suffered his first major setback as the Liverpool manager when his side went out at the hands of a team about to make their debut in a European quarter-final. Braga's 1-0 lead from the first leg in Portugal was enough to see them through against a Liverpool team bereft of attacking ideas, despite starting with Andy Carroll for the first time.

If the record signing was supposed to strike fear into the opposing defence in this last-16 tie he failed to do so. This was a deflating home debut, as well as a dismal night for Dalglish, who bore no responsibility for going out of the FA Cup at Manchester United but has since put Liverpool on an upward curve. This was his team selection, with his new centre-forward, and the Europa League was Liverpool's only remaining chance of winning silverware this season. It was not one of the great European nights at Anfield, the Braga goalkeeper was only asked to make a couple of stops all evening. Liverpool now face a daunting task to qualify for Europe next season through the league, which must be hard to take when the stadium DJ spent half-time on St Patrick's day spinning records looking forward to summer in Dublin.

"Andy has got tremendous assets, we've just got to learn how to get the best out of him," Dalglish said. "We could do with a bit more creativity, we knew Braga would be well organised and it was up to us to break them down. We had an option to get into Europe next year by winning this competition. If we don't make it through the league it will be a disappointment but you only get there if you win enough games. We've always known that."

Liverpool's new £35m striker was quickly into action, knocking a ball down for Joe Cole to force the first save of the game from Artur, then climbing to reach the subsequent corner and placing a header just wide of the far post. Carroll collapsed in a heap at the next Liverpool corner, complaining with justification that he had been shoved in the back by Alberto Rodríguez, only for the Italian referee to award a free-kick in Braga's favour. When the official awarded a throw in the wrong direction a few minutes later Dalglish was incensed and the crowd began to complain, a restlessness that increased when it became clear that neither Cole's initial energy nor Carroll's height would bring about an early breakthrough.

Without the ineligible Luis Suárez the home side lacked the cleverness that was evident against United and were almost as laboured as they had been in Portugal. If the co-owner John W Henry, watching from the stand, had travelled to this game to see what £35m worth of centre-forward looks like, he could only have been underwhelmed. Carroll rarely looked as dangerous as he had in the first five minutes, struggled to get on the end of crosses and won only a modest proportion of aerial contests in midfield. When he finally got a chance, from Maxi Rodríguez's cross on the stroke of the interval, he steered his header tamely wide.

Braga did not offer much in the first half either apart from an optimistic drive from distance by Lima that flew straight to Pepe Reina, although Alan came up with a deft turn on the half-hour that left Danny Wilson floundering and obliged Martin Skrtel to come across and block the shot. Braga did not need a goal, however; they were happy with the advantage from the first leg. It was up to Liverpool to force the pace and Dalglish must have been disappointed with the number of opportunities created.

Carroll let his frustration get the better of him early in the second half, bringing down Alberto Rodríguez when he had no realistic chance of winning the ball. The striker had just been pulled up for a marginal offside when he would have been clear on goal, and when he attempted to overtake the last defender on his next opportunity he was thwarted by Rodríguez expertly shielding the ball. Perhaps Carroll was nervous. It cannot be easy making your home debut as the most expensive English footballer in front of Fabio Capello as well as the man who put up the money.

Raul Meireles put a header over the bar as Liverpool's attacks became ever more desperate, though the contest was almost settled early when a defensive mix-up gave Alan a brief chance at the other end that he wasted. "That was the best chance of the game and we had it," the Braga coach Domingos Paciencia said. "Alan though he was offside, and he wasn't. This is the best result in our history, we have never been in a European quarter-final before. It is a new level for us, that's why we celebrated in the way we did." David Ngog came on and shot straight at Artur, but Liverpool's night was summed up when a late Dirk Kuyt effort flew nearer the the corner flag than the target.

Braga defended resolutely as Liverpool's final onslaught began, though by the standards of battle charges on European nights at this ground it was nothing special. Carroll headed a chance against Kuyt, Artur made one notable save to deny Skrtel and Liverpool were out.