Italy failed to land the right to host soccer's Euro 2012 championships, leaving officials dazed but determined to complete reforms launched after recent scandals.
"I'm really sorry. This is a disappointment," said Sports Minister Giovanna Melandri after UEFA voted 8-4 to give the tournament to Poland and Ukraine.
"But our programme to revamp the game won't budge an inch," Melandri went on.
"We must change a system that no longer works".
Italian Soccer Federation (FIGC) chief Giancarlo Abete said "once the disappointment is over we have to show we can restructure our grounds, even without the European championship".
Neither official blamed international criticism of crowd control for the defeat - but Italy soccer icon Gigi Riva did.
Citing "police helmets and lack of security," he claimed "we created an embarrassing situation for the whole of world soccer".
With crowd control already high on the agenda after a policeman's death in Sicily last year, concern over alleged use of heavy-handed tactics at the recent Champions League quarter-final between Manchester United and AS Roma further dented Italy's image, pundits said.
Riva, a top member of the Italy management team that brought the country its fourth World Cup last year, also cited the Calciopoli referee-rigging scandal, which reared its head again last week as more names of refs emerged.
Italy had seen itself as favourite to host Euro 2012 after reaching the last three in the contest last year - when the joint bid from Poland and Ukraine just squeaked in.
UEFA chief Michel Platini said Italy's defeat "surprised me too."
He emphasised the "passion for sport visible in every bid".
The third bid, from Hungary and Croatia, received no votes.
