Bastian Schweinsteiger set-up two goals and scored another as three time European Championship winners Germany shocked Cristiano Ronaldo's Portugal 3-2 in a pulsating Euro 2008 quarter-final in Basel.

Germany could not have started any better and were two goals up after just 26 minutes as many pundits' tournament favourites Portugal were rocked early on.

The opening goal came thanks to an electric run down the left flank by forward Lukas Podolski, who picked up Schweinsteiger racing into the box. The Bayern Munich midfielder crashed the ball past Ricardo Pereira for the lead after 22 minutes to make up for being sent off against Croatia earlier in the tournament.

Schweinsteiger turned from scorer into provider four minutes later, picking up tall striker Miroslav Klose in acres of space from an accurate free kick. The Golden Boot winner at the 2006 World Cup had no trouble heading past Pereira for a surprising 2-0 lead with Portugal containing the likes of Manchester United super star Ronaldo and Barcelona playmaker Deco.

But Portugal maintained their composure and reduced the deficit five minutes before half-time through Benfica centre forward Nuno Gomes. The goal was set-up following a typical speedy run and shot by Ronaldo which forced a low save from Arsenal veteran Jens Lehmann - but Gomes was on hand to smash the loose ball home with the German defence scrambling.

Real Madrid defender Kleper Pepe should have leveled the game for Portugal 12 minutes after the break from a vicious corner, but somehow put his header over the bar from four meters out with Lehmann beaten.

Pepe will surely rue the miss as Chelsea midfielder Michael Ballack stole a yard on some sloppy Portugal defenders to head home from another Schweinsteiger tracer bullet free kick.

There was a suggestion that Ballack pushed defender Paulo Ferreira in the box to create space for the header, but the goal stood as Germany looked to keep their proud cup record going with a 3-1 lead.

Sporting's Helder Postiga stole a late goal for Portugal with just three minutes remaining to setup a thrilling end to a terrific encounter.

Germany held on for the win and will face the winners of Croatia versus Turkey in Ernst Happel on Friday.