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Holders Rangers were dumped out of the Scottish Communities League Cup by a youthful Falkirk side.

Farid El Alagui, who had an effort cleared off the line in the first half, twice headed past Neil Alexander to give the Bairns a two-goal lead.

However, headers by Dorin Goian and Nikica Jelavic levelled matters.

But, in injury time, Mark Millar's free-kick evaded Alexander and found its way over the line to give Falkirk a famous victory.

A perfectly observed minute's silence was held ahead of kick-off to mark the passing of Derek Grierson at the age of 79, who served both Rangers and Falkirk in the past.

First Division Falkirk fielded four teenagers in their starting XI and had to deal with some early pressure from the visitors.

Rangers midfielder Lee McCulloch skidded a shot towards goal but keeper Micheal McGovern was up to the task while Gregg Wylde's shot from distance flew over the bar.

The Scottish Premier League leaders almost had the breakthrough after 25 minutes when Alejandro Bedoya hit a left-foot-strike but McGovern dived to his right to make a wonderful save.

El Alagui (right) scored Falkirk's first two goals

Falkirk grew into the game, adopting a 4-5-1 formation so favoured by former Rangers manager Walter Smith on his European travels.

El Alagui directed a shot on target which Wylde was on hand to clear off the line and David Weatherson lifted a shot onto the top of the Rangers net near the end of the first half.

After the restart Rangers came quickly out of the traps and Wylde created some space to fizz a ball along the 18-yard line for team-mate Kyle Lafferty to dink just over the bar.

At the other end, Alexander had to pull off a terrific save to block a deflected Millar shot.

But the Bairns were soon ahead as Kieran Duffie's inviting cross was nodded past Alexander by top scorer El Alagui.

Rangers picked up the pace considerably after losing the opening goal with manager Ally McCoist substituting Bedoya with Steven Naismith.

And Naismith soon made an impact, blasting a shot off the upright.

Carlos Bocanegra also shaved the post with a header from the edge of the box having met an outswinging corner by Steven Davis.

But, after weathering the storm, Falkirk mounted a counter-thrust and Craig Sibbald centred for El Alagui to bullet another header into the net.

Rangers poured players forward and eventually registered when Steven Whittaker's cross was converted by the head of Goian.

And more intense pressure produced the leveller, Wylde providing the assist for Jelavic to score with his head. However, Falkirk felt a free-kick had been due to them in the run-up to the goal.

As extra time beckoned, the hosts won a free-kick and Millar's effort seemed to catch Alexander out as the keeper's attempted save carried the ball onto the crossbar and into the net.

And the Bairns survived one final push from Rangers to book a place in the quarter-finals.

Falkirk manager Steven Pressley:

"I can't praise my players enough. I'm so proud of them.

"Their application, their desire, their willingness to do the things that we continuously talk about, their belief and composure under pressure was remarkable for such a young side.

"It was a truly remarkable win, one that everybody should be proud of. Our supporters have got to bask in this, it's a wonderful result for the football club.

"Financially, it's another big result for us.

"For Rangers to come back and level the game, you'd normally expect the more experienced team and stronger team (to win).

"But the young players showed remarkable mentality. It's testament to our academy system. They played like men."

Rangers manager Ally McCoist:

"When you don't turn up till you're a goal down, sometimes you get what you deserve. Effectively, that's what we did. That's not good enough.

"There was just not enough of the boys playing at the right tempo. It was a really, really poor first-half performance.

"I'm just very, very disappointed and angry that we didn't start the game as we finished it.

"There's no shirking any issues. We put out a team that should've been good enough to win the game and they didn't. So, for that, we deserve criticism.

"It's a massive blow. We just have to see how we react to it.

"We knew Falkirk would give us a game. They fought like a good team, they fought for it. It's to Falkirk's credit that they're through."