PARIS (REUTERS) - Holders Spain may have been inferior in a 2-0 defeat by Italy in the last 16 at Euro 2016 on Monday but their exit did not mark the end of an era and they have a bright future, said coach Vicente del Bosque.

Spain had dominated European football since 2008 by winning two Euros, with a World Cup title in between, but were outshone by an organised and clinical Italy at the Stade de France.

"I don't think an era has finished, but we understand how difficult it is to win a major championship," Del Bosque told reporters. "Spanish football has a great structure and we've been working for many years on it. We have a good youth academy and good young players."

Proving that point, Spanish teams have ruled in European club competition with Real Madrid and Sevilla winning the Champions League and Europa League respectively this year.

But del Bosque, whose side had not lost to Italy in a competitive match since 1994, said their confidence was hit by the last-gasp 2-1 loss to Croatia in their final group game.

"We played two good games and the third one was not too bad, but the last-minute goal did us damage," he said.

Del Bosque declined to say if he would continue as Spain coach, although he added that his immediate future would be discussed with the president of the Spanish football federation.

"We were a bit timid and didn't play with enough bravery and decisiveness. We took more risks, but we couldn't equalise," he said.

Del Bosque added that work would start now to turn things around and Spain would be able to get their revenge when they face Italy in the 2018 World Cup qualifiers from September.

"The Italians played well and were very effective. It's a difficult style of football to play against and they deserved to be in last eight," he said.