WITH their next manager in Japan, Arsenal look to be also heading out of Europe, fuelling the doubts that hang over British clubs' ability to compete on the international stage.

Arsenal failed to obey the first law of Highbury do not concede goals and so travel to Germany for the second leg more in hope than expectation of pulling off the minimum 2-0 victory they will need to progress in this tournament.

Though Borussia rode their luck, they were the classier side, with Effenberg in midfield a stylish conductor of the visitors' best passages. Tony Adams was missing injured and Steve Bould only partially fit, but the team lacked the parsimonious organisation that characterised their best years.

The caretaker manager, Stewart Houston, will really have proved a point to the Arsenal board who overlooked him for the full time post if he can pull round this tie ahead of Arsene Wenger's eventual arrival in the Highbury hot seat. And there was speculation last night that this might not now be until January.

Arsenal's worry is at the back where they have now conceded eight goals in their last three games. In each match they have gone 2-0 behind, but this time failed to notch the draw that characterised the other two games.

It did not help that Dennis Bergkamp went off injured after just 19 minutes last night the hamstring injury looks serious but Borussia posted their intentions early on when David Seaman, back after injury, had to save well from Juskowiak then up round Effenberg's 25 yarder.

Arsenal perhaps realised their luck was out when goalkeeper Kamps made an instinctive one handed save from Wright. Then on 34 minutes Hart son's shot from Dixon's cross hit the post and bounced back into Kamps' arms.

Four minutes later the Germans went ahead, Nielsen springing the home offside trap to set up Juskowiak. The Pole actually looked offside as he beat Seaman but there was no flag.

Fifty two seconds after the break and the Germans were 2-0 up. Linighan's mis-control and lack of pace let Effenberg in on Seaman who spilled the first shot and was helpless as the German gobbled up the rebound.

This was the cue for Arsenal to move up a gear from fast to frenetic and after nine minutes a Paul Merson goal led the comeback for the third consecutive game, this time from a 25 yard shot bent inside Kamps' post.

But though the goalkeeper then flicked Wright's close range strike round the post, the Germans soon made it 3-1, Passlack rising unmarked to head in Hochstatter's free kick.

Wright eventually narrowed the deficit when Kamps could only parry the striker's initial header and Arsenal's leading scorer in Europe buried his 14th goal.

But Kamps was the final hero for the Germans, saving brilliantly from Merson's 30-yard rocket and at the back post to keep out Hartson's header.

Afterwards Houston said he had not heard about any new date for Wenger's arrival and he refused to comment on whether he would be joining Graham at Leeds. But he was certain of one thing. "We've got to get back to boring 1-0 wins."

Houston, after admitting that it was my" worst night in Europe", predictably promised. "The tie's not over yet."