Manchester City have had Champions League disappointments before but few will have hurt as much as this – arguably their best chance to finally claim the prize they covet most, cast aside amid controversy but even more by self-inflicted wounds.

Pep Guardiola’s side played with a potent mixture of confidence, discipline and panache to dismiss Real Madrid and set up a quarter-final against Lyon in this new one-off format in Lisbon that seemed to suit City perfectly.

And yet, as they have in Guardiola’s previous four seasons at City, they have come up short when trying to cross the barrier into the Champions League semi-final.

Guardiola called this a “once in a lifetime” chance but it was wasted as the Catalan was overcome by caution, gripped by conservatism that cost him and his team dear.

First, the shock 3-1 loss to underdogs Lyon means this must now be regarded as a season of relative failure for Guardiola and City when measured against the ambitions, aspirations and standards of the club.

The League Cup was won against Aston Villa but their Premier League title was lost tamely to Liverpool, while the FA Cup holders lost 2-0 to Arsenal in the semi-final.

Dress it up how you like. If City’s final reckoning had been flagged up at the start of the season, no-one at Etihad Stadium would have accepted it. At best, very best, it would have been viewed as a desperate letdown.

The Champions League appears to cast a peculiar curse on City and on a manager who has not won it since Barcelona’s 3-1 triumph over Manchester United at Wembley in 2011.

City were undone at the quarter-final stage last year by the merest touch and a VAR offside in the final seconds of the second leg against Tottenham, and here they can certainly offer a valid complaint about injustice.

Aymeric Laporte appeared to be clearly upended by Moussa Dembele before he scored Lyon’s vital second but sympathy is in short supply for City elsewhere.

How does Raheem Sterling, 31 goals this season, lash the ball over an open goal from five yards with the score 2-1? And how, just 59 seconds later, does the normally reliable goalkeeper Ederson fumble the most routine shot from Houssem Aouar, allowing Dembele to send City out?

In this instance, however, the main responsibility must lie with an over-thought, over-respectful approach from Guardiola, whose decision to play a back three allowed Lyon a lead and a foothold and left so many of his creators and manipulators-in-chief, such as Bernardo Silva, David Silva, Riyad Mahrez and Phil Foden, on the bench.

It led to a dull first half lacking in creation. City, by Guardiola’s own hand, gave Lyon confidence. He looked like he was guilty of over-thinking it again, a common problem with his previous Champions League strategies. Lyon are a decent side, they put Juventus out after all, but good enough for Guardiola to change tack so crucially? Surely not.

Manchester City, managed by Pep Guardiola, lacked creativity in a Champions League quarter-final. In football terms it sounds like sacrilege and that is exactly what it was.

And a fatal error.

In the wider context it simply reaffirmed the faults in this City team that led to them losing nine league games and being overpowered by Liverpool in the title race, undermined in the FA Cup semi-final against Arsenal and becoming the victims of a classic smash-and-grab here.

Who knows how City would have fared against rampant Bayern Munich after their 8-2 torture of Barcelona? We will never know because they have never been good enough to reach the last four under Guardiola.

Guardiola reached the last 16 in his first season at the club and the quarter-finals in three subsequent Champions League campaigns. This is simply not good enough and cannot be disguised by all the wonderful domestic successes he and City have enjoyed.

City won the title under Roberto Mancini and Manuel Pellegrini and while nothing must be taken away from Guardiola, he was appointed as the man who would cross that final frontier and claim the trophy that would be confirmation of the club’s arrival as a European superpower.

He has yet to achieve it. Could it be that City and Guardiola lurch under the weight of expectation and hope when they arrive at the latter stages of the Champions League, the prize regarded as they ultimate destination for the club’s Abu Dhabi-based hierarchy?

In among the questions surrounding his system, City’s defending was still self-destructive, as it has been too often in key moments in the past.

Guardiola, who surely made a mistake not replacing Vincent Kompany’s leadership and presence when he left, already knows this side is in need of refreshing.

One man who definitely will not be back is the great David Silva, and what a sad end it was for the 34-year-old, a club icon after a decade at City, thrown on in a panic to replace Rodri with just six minutes left and the Champions League dream dying before his eyes.

Foden will fill that vacancy, while the promising Spanish attacker Ferran Torres has arrived from Valencia, but it is further back that Guardiola has his most pressing needs.

Laporte is outstanding, although not without flaw, but the arrival of Nathan Ake for £40m from Bournemouth is only a start and surely further reinforcements are needed in the mould of Napoli’s Kalidou Koulibaly.

Where does this leave England’s John Stones, who is now a marginalised figure? Looking for a new club, one suspects.

City are also vulnerable in the full-back positions, with Kyle Walker inconsistent on the right and none of Benjamin Mendy, Oleksandr Zinchenko or Joao Cancelo looking anything like the class required on the left.

There is so much right with this side. Just look at the class of Kevin de Bruyne, the brilliance of Raheem Sterling, the easy-on-the-eye style that is gloriously deadly in full cry.

Too often this season, however, too much has been wrong and so it was again in Lisbon on Saturday.

Cut this any way you like, but another Champions League exit means this season has simply not been good enough for Manchester City and still leaves that gaping hole in Guardiola’s record of success since his arrival at Etihad Stadium.