Carlo Ancelotti's position as AC Milan boss is under scrutiny after a mature and organized Arsenal dumped the holders out of the Champions League at the first knockout round stage.

The English Premier League leader won 2-0 at the San Siro on Tuesday to go through to the quarterfinals 2-0 on aggregate.

Arsenal's Cesc Fabregas (second left) watches as his shot hits the crossbar during their Champions League first knockout round, second leg match against AC Milan in Milan on Tuesday. Arsenal won 2-0.

Ancelotti's side has been below par all season and is a disappointing fifth in Serie A. Italian media has constantly linked ex-Chelsea coach Jose Mourinho and former Italy boss Marcello Lippi with the job, given Ancelotti's problems.

Club president Silvio Berlusconi quickly gave his backing to the coach but his furious face in the stands said otherwise.

"Yes absolutely," Berlusconi told Sky when asked if Ancelotti would be staying. "Arsenal played very well, they deserved it. For a major part of the game they didn't let us see the ball."

However, former Italian prime minister Berlusconi is in the middle of an election campaign and he may feel his team losing so meekly will not reflect well on his bid to regain power.

Ancelotti almost laughed when asked if he may be sacked and might think he is untouchable after lifting the European Cup last year.

However, many fans will disagree if Milan continues to struggle to make the Champions League next season.

"After Athens we won the World Club Cup in Tokyo. The cycle will go on," he said before reminding Rossoneri supporters how far they have fallen. "Our objective is fourth place."