Billy Stark's first match as boss of the Scotland Under-21 side ended in defeat as hosts Portugal reached the final of the Vale do Tejo mini-tournament.
Former Queen's Park boss Stark succeeded Maurice Malpas, who has since become Swindon manager, in the under-21 role and is also overseeing all the Scottish youth sides.
His side finished with 10 men at the match staged in Abrantes, a small town in central, inland Portugal, and Scotland will face Ukraine tomorrow in a third/fourth-place play-off before coming home.
Rocco Quinn got Scotland back into the game with eight minutes remaining, and Stark's 10 men almost drew level in the end when Quinn's Celtic colleague Ryan Conroy went close.
However they were 2-0 behind by the time Kilmarnock's Jamie Hamill was dismissed in the 76th minute, for a second yellow-card offence in the space of 15 minutes.
Portugal had gone in front after 33 minutes when SD Fatima striker Saleiro converted a precise cross from Roma defender Antunes beyond Hearts youngster Jamie McDonald in the Scotland goal.
With Everton midfielder Manuel Fernandes and Bolton striker Vaz Te in their line-up, the hosts were taking the game seriously.
Scotland had been hit by withdrawals ahead of the game, with the Motherwell contingent of Marc Fitzpatrick, Mark Reynolds and Ross McCormack among those who pulled out of the squad. They were due to face Dundee in the Scottish Cup tonight, a match which had to be called off.
Scotland were still strong however and the second Portuguese goal from Inter Milan prospect Pele in the 66th minute did not spell the end of their interest in the game.
Pele beat MacDonald with a superb 25-yard effort to give Portugal breathing space, but Quinn got the better of Fulham reserve 'keeper Ricardo Batista in the 82nd minute to raise Scottish hopes. Conroy was a whisker from a late leveller, while Hearts full-back Lee Wallace also failed to find the target as Stark's side pressed.
The home side clung on however and, after tomorrow's game the young Scots will turn their attention to their European Under-21 Championship qualifiers, the next of which is the crucial clash with unbeaten Group Six leaders Finland at Pittodrie on March 26.