Underdogs Italy produced a tactical masterclass to defeat Belgium 2-0 in Lyon Monday and inflict a shock defeat on one of the favourites for Euro 2016.

Emanuele Giaccherini scored the opening goal in the 31st minute, controlling a magnificent long pass from Leonardo Bonucci to slot home. It was a thoroughly deserved reward for Italy, who more than neutralized the supposedly superior individual skills of Belgium with their organization and work-rate.

Belgium's best chance to level was spurned by Romelu Lukaku early in the second half but Italy also had chances to double their lead before Graziano Pelle sealed the win in injury-time.

Group E favourites Belgium are now bottom of the table while Italy sit top after Ireland drew 1-1 with Sweden earlier Monday. In the next games, Belgium will look to bounce back against Ireland on Saturday after Italy face Sweden on Friday.

"I think we were excellent today in preparing the game from every perspective and overturning the odds," Italy coach Antonio Conte said.

"Two sides played against each other and produced an entertaining game of football with chances at both ends. It shows in football nothing is decided, not at the start of the game, on paper but it is decided on the pitch."

Torrential rain had pounded Lyon before the match, drenching fans who had mingled peacefully in the city centre, but it eased before kick-off, and the pitch handled the deluge well.

Belgium, roared on by a boisterous support, started brightly as Lukaku almost got behind the Italian defence but this proved to be a rarity in the first half.

Italy adopted a flexible formation which depended on wide players Antonio Candreva and Matteo Darmian flying up and down the flanks in a tactical system which offered a 5-3-2 in defence and a remarkable 3-3-4 when pushing forward.

Unsurprisingly Darmian lasted only 58 minutes of this tortuous effort, replaced by Mattia De Sciglio, but Candreva played the whole game, even assisting Pelle's late goal.

Belgium seemed unsure how to react as they struggled to find stars Kevin de Bruyne and Eden Hazard out wide and were blocked by the Italian wall through the middle.

"It's very difficult to say after the match (what went wrong)," Belgium coach Marc Wilmots said. "I think we were a bit too compact in the first half hour. We didn't lose many chances but then conceded the first goal from a ball over the top."

Italy were also capable of posing problems to the Belgian defence as Candreva failed to find a team-mate in the right of the box and Pelle sent a curling shot just wide.

The opening goal came in a moment of inspiration from Bonucci, whose raking ball from his own half caught the Belgian defence flat-footed. Giaccherini killed the pass superbly and calmly curled round Thibaut Courtois from 12 yards to break the deadlock.

"I'm always willing to help out the team, give 100 per cent and do what the coach asks of me," man of the match Giaccherini said. "If I'm able to perform like tonight, I'm delighted.

"But what mattered for us was the victory, so I'm pleased to have scored but ultimately it was (about) the team performance."

Italy were suddenly dominant as Candreva had a powerful strike saved but Pelle should have done better than head wide with Courtois out of the picture after Belgium failed to clear a corner.

Half-time arrived with Buffon tested only by a long shot from Radja Nainggolan but immediately after the restart Lukaku should have levelled when he clipped wide having been set up by De Bruyne on the counter.

Seconds later Courtois kept Belgium alive with a magnificent one-handed save to claw Pelle's header from the line as the previously tight encounter briefly opened up.

Belgium displayed more urgency as Italy began to tire late on but cynical fouls from Giorgio Chiellini, Eder and Bonucci all halted potential breaks. The yellow cards were a price worth paying.

Substitute Divock Origi headed over eight minutes from time as Belgimm grew increasingly desperate but it was Italy who came closer to a decisive goal as their own substitute Ciro Immobile had a powerful drive batted away by Courtois.

And the killer blow arrived deep into injury-time when Italy countered and Candreva's chipped cross was emphatically volleyed home by Pelle.

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