Italy coach Marcello Lippi hailed his side's fighting spirit after Francesco Totti's stoppage-time penalty sent them in to the World Cup quarter-finals at the expense of Australia.

The Azzurri played most of the second half of the second round clash in Kaiserslautern with ten men following the controversial dismissal of Marco Materazzi for a foul on Marco Bresciano.

The Socceroos were unable to find a way past Italy's determined back-line and paid the price when Lucas Neill felled Fabio Grosso in the penalty area deep in to injury-time.

Totti, who had started the game on the bench, kept his cool to slot the spot-kick beyond Aussie goalkeeper Mark Schwarzer and secure a 1-0 victory.

"When a defender (Grosso) in the 92nd minute of the game gets into our opponents' area and wins us a penalty having been brought down, that's something extraordinary," said Lippi.

"Then Totti has scored with a great kick to put us into the quarter-finals.

"We have great respect for our opponents. We had four or five chances in the first half and we hardly gave away any space to our rivals.

"As for the sending-off, I think my team have shown a lot of character because it's not easy to defend with ten men. And even with ten men we gave little away to Australia."

Television replays suggested Grosso had deliberately fallen over Neill's challenge and that the penalty should not have been awarded.

Socceroos coach Guus Hiddink was furious about the decision, but admitted his side should have made more of their one-man advantage.

"Overall you can have doubts about the penalty," said the disconsolate Dutchman.

"We are very disappointed because we were so close but I can be very proud of the team. I think the only thing we can blame ourselves for is that we did not get a goal."