Burley's national side had a disappointing World Cup campaign
Scotland have dropped 16 places to 46th in the latest Fifa world rankings following last week's 2-0 friendly defeat to Japan in Yokohama.
It is the lowest since 2006 and comes after failing to reach next summer's World Cup finals in South Africa.
Scotland will be in pot three when the draw for the next European Championship qualifiers is made.
George Burley's side yielded just three wins from their recent World Cup campaign, two against Iceland.
The drop in Scotland's fortunes also comes in a week when Rangers manager Walter Smith warned that Scottish football is "in danger of dying" if the Old Firm do not make moves to join a breakaway Atlantic League or a move to England.
That proposed Atlantic League competition could potentially feature the involvement of clubs from Sweden, Denmark, Belgium and Netherlands and be played on a weekly basis but has not moved beyond discussion stages.
Smith believes the decline in the ability of Celtic and Rangers to compete on the European scene is directly related to their financial strength.
The poor performances of Scottish clubs in Europe over the past two seasons has brought about a reduction in automatic qualification for the Champions League.
Scottish Premier League champions could be required to play a qualifying round in the 2010 season before potentially reaching the group stages should the winners of the 2009/10 Champions League fail to qualify for the tournament from their domestic league.
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