Coach Tim Hamill was on his haunches and in tears after Australia’s men’s water polo team were knocked out of medal contention in an Olympic heartbreaker.

The Sharks lost in a penalty shootout by one goal against the United States in their quarter-final on Wednesday at the Paris La Defense Arena.

The Americans’ 11-10 win pitches the Australians into the fifth to eighth classification stage after Hamill’s team blew a three-goal lead in regulation time.

“I am devastated and heartbroken for the playing group,” Hamill said.

“To see what they’ve gone through over the last couple of years, with a lot of doubters and very little support at different times, I really feel for the playing group.

“Most times in life you get what you deserve. But I don’t feel that’s the case tonight.”

The Australians, inspired by Luke Pavillard’s five-goal haul, led by three goals in the second quarter but were held scoreless in the third.

The US equalised with just 32 seconds remaining in regulation time, locking scores at 7-7.

Australia’s Milos Maksimovic and Chaz Poot had shots blocked in the shootout, ending their hopes of reaching the semi-finals.

The Sharks logged wins over powerhouses Serbia, Hungary and France in the group stage but lost their last group game to minnows Japan.

“The wins we had over Serbia and France and Hungary, very special moments for us,” Hamill said.

“But they are draining in their own way, you saw that in our performance against Japan.

“I don’t think people back in Australia really realise what we’ve achieved during this Olympic Games.

“Water polo is a small sport down under but what these players have achieved this week, and beating some of the biggest powerhouses in world water polo and taking a great team like America to a shootout, is significant.”

The Australians led 3-1 after a first quarter featuring a violent flashpoint: American Johnny Hooper was red-carded for a brutality.

Hooper landed a blatant punch to the face of Australia’s Poot which was picked up on video review.

The Sharks extended their lead to 4-1 but the US scored the next four goals and held Australia goal-less in the third period.

But with one minute 53 seconds left in the game, Pavillard struck again with another powerful left-armer only for the last-gasp equaliser by the US.

Hamill said the Sharks needed greater exposure to international competition - and funding - to take the next step and medal at the Olympics.

“We have been quite deliberate to not talk about that (lack of funding),” he said.

“You need to play the cards you’re dealt and they were the cards we were dealt a couple of years ago.

“But absolutely, if we had the opportunity to receive some more funding, that would make this opportunity come again at an Olympic Games and we would push up in to those medals.”