Australia’s players and fans were outraged when Spanish referee Luis Medina Cantalejo awarded Italy a penalty in the fifth minute of stoppage time after Lucas Neill had brought down Fabio Grosso.

Substitute Francesco Totti converted the penalty to give 10-man Italy a dramatic 1-0 victory over Australia in Kaiserslautern and a place in the last eight of the World Cup.

Debate raged over the decision and Fifa were accused of not addressing the problem of diving and faking injuries in the world game.

In a television interview here yesterday, Blatter said referees at the tournament in Germany “were not at their best”.

He said the antics of players were the real problem for the game.

“I think there was too much cheating on the players’ side,” Blatter said.

“I agree with them and I would like to apologise (to) our fans in Australia.

“The Socceroos should have gone into the quarter-finals in place of Italy … you go into extra-time and you are 11 against 10. But that is presumptuous.”

Football Federation Australia (FFA) officials accepted Blatter’s apology, but remained wary that it came during an interview for Australian consumption only.

“It’s well after the event,” FFA chief executive John O’Neill said yesterday.

“The position he’s stated is what all of Australian football fans felt at the time.

“It’s now four months after the tournament. It’s a nice gesture, but it doesn’t change the result.”

Blatter admitted the standard of refereeing in Germany was not as high as he would have liked.

“I said at the referees’ committee after the World Cup, when compared to the performance of 2002, you have improved, but in my opinion not enough.”

But he added: “But from the quarter-final to the semi-final, then you see the referees were back to being the best.”

Blackburn Rovers defender Neill, who was captain in Australia’s two recent internationals against Paraguay and Bahrain, welcomed Blatter’s apology, but said the situation was worsening.