The moment Capello lost his faith in Walcott

Dressing down after Mexico shambles was the turning point, while Barry and Crouch hopeful of starting in opening game

Theo Walcott got the first hint that his World Cup place was in doubt when Fabio Capello picked him out in front of the England squad when they watched a DVD of the Mexico game last week and gave the winger a public dressing-down for his performance.

Yesterday, Walcott's worst fears were confirmed when, having failed to respond in the following game against Japan on Sunday, Capello left him out of his final 23-man squad for the flight to South Africa this afternoon. The 21-year-old was told the news by phone from Capello when he was on the golf course with his father Don.

The England players had their doubts about Walcott, who lost out on the two right-wing places to Aaron Lennon and Shaun Wright-Phillips, after the Mexico debriefing. Previous to that he had been one of Capello's favourites and a regular starter when fit following his hat-trick against Croatia in Zagreb in September 2008 but the hairdryer treatment from the Italian showed his faith was beginning to ebb.

It was a dramatic turnaround in fortunes for a player who was a shock inclusion in Sven-Goran Eriksson's squad four years ago as a 17-year-old having never played a Premier League game for Arsenal. This time around his family and agent were already booked into the Sun City resort near Rustenburg, where England play the United States on 12 June, in anticipation of him being in the squad. Capello is understood to have regarded the decision to take one from Walcott, Lennon and Wright-Phillips as by far his toughest call.

A source in the England camp said: "It was considered that we should take only one left-back [in order to get Walcott in as a third right-winger] but in the end that was not right, we had to pick two from those three players."

With his usual good grace, Walcott said yesterday that he "respected" Capello's decision and wished the team the best for the tournament. His statement, issued through his public relations company, came out before the Football Association made their official announcement that the player was not in the squad which finally arrived at 3.45pm after the organisation had struggled to contact all the players who had been left out.

Despite having scored a hat-trick for Capello in the Croatia game that got the Italian's England regime up and running, it was felt that Walcott had shown too little against Mexico and Japan to warrant selection. His performances in training were also regarded as patchy at best with major questions about his crossing.

Capello's staff have assigned David James the No 1 jersey among the 23 squad numbers which have to be submitted to Fifa and there are suggestions that Peter Crouch is also among the first XI. However, the Capello camp are saying that nothing should be read into the allocation of numbers and that they asked the players to give them two options each to ensure they had a number they were happy with.

There was good news from Gareth Barry's assessment by Capello's medical staff yesterday with the Manchester City midfielder having made such a quick recovery that there is even hope of his ankle being ready to allow him to play in the game against the US on 12 June. His biggest obstacle to playing in that game will be whether he is match-fit or not – the injury is expected to have healed by then.

Stephen Warnock pipped Leighton Baines to the left-back understudy role after Capello lost faith in the Everton man following a poor performance against Mexico. Otherwise there were few surprises with Michael Dawson, Scott Parker, Tom Huddlestone, Adam Johnson and Darren Bent also left out of the final squad that flies today to Johannesburg and then on to their base in Phokeng outside Rustenburg.

The full list of squad numbers will be released by Fifa over the next week. In the meantime, the FA are hopeful of announcing that they have signed a new contract with Capello today in which both parties will have deleted the break clause in the deal which allows him to leave on reduced compensation terms this summer. Internazionale president Massimo Moratti had expressed interest in exploiting the clause.