AC Milan moved a huge step closer to the last four of the Champions League, defeating city rivals Inter Milan 2-0 in the home leg of their all-Italian quarter-final here Wednesday.

Dutch defender Jaap Stam broke the deadlock in first half stoppage time before Andriy Shevchenko, playing his first game since fracturing his left cheekbone on February 19, doubled Milan's advantage 16 minutes from time.

The goals, both headers, were created by Andrea Pirlo's superbly delivered free-kicks.

Inter were denied a precious away goal in the closing stages when substitute Giorgios Karagounis' angled shot rattled the post.

Milan, who knocked Inter out in the semi-finals of the same competition two years ago before beating Juventus in the final, are now firm favorites to reach the last four.

Milan, joint top of Serie A with Juventus and a massive 16 points clear of Inter, have not been beaten by their neighbours since March 2002.

With Brazilian striker Adriano ruled with out with a left knee injury and Christian Vieri still not 100 per cent fit, Argentine forward Julio Cruz partnered livewire Nigerian Obafemi Martins in Inter's attack.

Before the match a minute's silence was observed in memory of John Paul II, who died last Saturday.

Inter enjoyed the better start and a superb strike by Serbian dead-ball specialist Sinisa Mihajlovic almost gave them an early lead, but his curling left-footed free-kick from 25 yards was tipped over the bar by Nelson Dida.

Several surging runs by Brazilian midfielder Kaka proved fruitless as Milan slowly imposed themselves, before Dida's hands came to the rescue again, palming Juan Sebastian Veron's free-kick away for a corner.

Cruz was denied by Dida for a second time before Stam struck with a rare goal.

Pirlo swung over a free-kick from the right and the giant Dutchman leapt highest to plant a firm downward header wide of Francesco Toldo's despairing reach.

Shevchenko almost doubled Milan's lead 10 minutes into the second half, but his outstretched boot just failed to put the finishing touch to Paolo Maldini's low cross.

Milan retained the momentum and their more positive approach to the second half reaped rewards with a second goal in the 74th minute.

Pirlo's free-kick from wide on the right wing was curled into the box and Shevchenko showed that his lengthy lay-off hadn't affected his reflexes by flashing a header past a helpless Toldo.

After Karagounis had been thwarted by the woodwork, Toldo prevented Milan from putting the tie further out of reach, tipping Shevchenko's rasping drive over the crossbar.

(Agencies)