A 3-2 defeat at home, by 'the better team', continues the Old Trafford side's torrid European form, Rooney's late penalty gives the English side hope for the second leg in Spain.
Athletic Bilbao add to Manchester United's Euro agony
Manchester United's miserable European season continued at Old Trafford as they suffered a stunning 3-2 first-leg defeat by Athletic Bilbao in their Europa League last 16 tie last night.
Bilbao appeared to have taken complete control of the game - and the overall tie - when the hugely impressive Iker Muniain shot his side into a 3-1 lead, only for Wayne Rooney to reduce the arrears with an injury-time penalty.
United manager Sir Alex Ferguson said his side had deserved to lose.
"We were well beaten, I have to say they were the better team," Ferguson told the Channel Five.
"I thought our defending wasn't very good tonight and that kept us on the back foot all the time. Our attacking play was very good at times and it was an open, entertaining match. But Bilbao were the better side."
Rooney's 23rd goal of the season had initially handed United an undeserved lead before Fernando Llorente equalised towards the end of the first half.
Oscar de Marcos struck to put the visitors ahead after 71 minutes, appearing on the end of one of the numerous slick Bilbao passing attacks to which United had no answer and making it 2-1.
Muniain started the move before Ander Herrera lobbed through a weighted pass, met by a first-time, left-foot volley from de Marcos, eight yards out, which left the United goalkeeper David de Gea rooted to the spot on its way into the bottom corner.
Then, with one minute of normal time left, Bilbao claimed a third as Muniain pounced ahead of a sluggish Rafael to slam the ball into an open goal after de Gea had palmed away de Marcos' low shot.
The goal was shrouded in controversy as it stemmed from a Bilbao free-kick that had been awarded in a bizarre incident after United defender Patrice Evra lost his boot.
Rooney handed United some glimmer of hope in the 91st minute, convincingly converting from the penalty spot after de Marcos had capped an eventful night by handling a cross from Javier Hernandez.
United, winners of just one of their previous four home European ties this season, endured a torrid start before taking the lead.
The opening goal came very much against the run of play as United made a rare foray into the Bilbao area, Hernandez and Ryan Giggs linking for the latter to burst into the 18-yard box.
Giggs, in turn, found Hernandez, whose shot was saved, one-handed, by Gorka Iraizoz but the goalkeeper only succeeded in pushing the ball into the path of Rooney, who tapped into the gaping net.
It was an injustice for Bilbao after Llorente's early shot that skidded just wide of the goal before Muniain failed with a penalty appeal after Chris Smalling appeared to tug his shirt.
But the goal did not appear to knock the visitors out of their stride.
Llorente headed just over from a de Marcos cross while, closest yet to a Bilbao goal, Markel Susaeta was clean through after 33 minutes, from de Marcos' pass, but elected to attempt a chip that flew just off target.
De Gea also saved well from Andoni Iraola's shot, made from a tight angle, before Bilbao claimed the equaliser they so thoroughly deserved a minute before the interval.
Llorente started the move that led to his goal, part of a flowing period of Bilbao possession, with a pass to Iraola, who sought out Susaeta over-lapping on the right.
The resulting cross was met by Llorente with a superb, close-range header that gave de Gea no chance.
Bilbao were no less impressive at the start of the second half, Muniain's darting run ending with a shot de Gea just touched around his post.
Llorente then had two glorious opportunities to put his side in front, within a minute of each other, firing into the side netting before unleashing a powerful 15-yard strike that de Gea saved spectacularly.
And the visitors went close again as the excellent Muniain exchanged passes with Herrera after 67 minute in a fantastic move that ended with his shot only being kept out by de Gea's left leg.
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