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Laws admitted. "We are obviously disappointed to be out of the cup but I don't think we can turn around and say we didn't deserve to get beaten.
"We deserved to get a little bit more out of the game in terms of a 25-minute spell when we really put them under pressure, passed the ball well and caused them a lot of problems.
"We needed to score then, that is the key against Premiership sides. When you get the chances you have got to stick them in the net. We did get one in but that was supposedly offside.
"The penalty killed the game for us. At the time it was against the run of play and I am sure they were relieved to get it"
Birmingham manager Steve Bruce was left rueing an injury to Turkey midfielder Muzzy Izzet.
The former Leicester player was just returning from an injury when he went over on his Achilles.
Bruce said: "We don't know how serious it is just yet but it was enough to take him off, and I would think he would have to be a doubt for Saturday.
"We just can't understand it at the minute. We feel like we have run over a black cat because out of seven midfielders I have got juts Damien Johnson fit."