Dallan roars through for Italy (Getty Images).

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Italy won the game but Canada gained all the credit after a magnificent second-half turnaround left the Azzurri rattled and fearing for their World Cup futures.

As it was, the Canadians bowed out after suffering their third defeat of the tournament and John Kirwan's Italy, who nearly threw it all away in the final quarter, go into face Wales on Saturday knowing a win will almost certainly secure them a place in the last eight.

It was an escape for Italy, who had been utterly dominant in the first half but failed to translate their superiority into points and led only 9-6 at the interval.

They emerged for the second period on the offensive and once Canada's centre Marco di Girolamo had been sin-binned for an offence at the ruck, the game appeared up.

Sergio Parisse crossed, Rima Wakarua - who finished with 14 points - converted and Italy ran up 10 points as di Girolamo watched on from the sidelines.

But when he returned the game turned on its head and those first half failings threatened to become costly.

Sparked by a dash down the left from Quentin Fyffe, Italy were trapped inside their own 22 and the set-pieces which had been so disastrous for Canada in the first half clicked into place.

Under absolutely no pressure, fullback Gonzalo Canale took his eye off the ball, knocked on and gave Canada a scrum inside Italy's 22.

This time Fyffe had the space on the overlap and scored after Jared Barker had sent a superb miss-pass across the face of the defence and David Lougheed handed outside to the on-rushing fullback.

It brought the 20,000 Canberra crowd to its feet and with 66 minutes gone the match was suddenly a five-point game and the Italians were in disarray.

The Canadian scrum became rock solid, their lineout clicked and after Josh Jackson - brought on after only 29 minutes to fix the set-pieces - had risen to snatch one against the throw and driven forward, Italian hooker Fabio Ongaro was sin-binned.

But only two minutes remained and try as they did, Canada could not force the crucial final score and Italy escaped with the victory - though Wales coach Steve Hansen will have watched on with interest.

The most likely scenario is that the winners of Saturday's game will join New Zealand in the quarter-finals.