Wallabies coach John Connolly has defended the stunning snubbing of George Smith just hours after the champion flanker captained his country for the first time.

Less than 12 hours after praising Smith for his "whale of a performance" in the Wallabies' humiliating 24-16 loss to the Ospreys, Connolly and fellow selectors Scott Johnson and Michael O'Connor omitted the 69-Test veteran from the Australian team to face Wales at Millennium Stadium on Saturday.

It was the first time Smith had ever been dropped completely from the Test side, unable to hold his bench spot with Stephen Hoiles preferred.

"He (Smith) is not in the team and he's very disappointed but I'm sure that he'll be back," Connolly said.

"He'll be back for the next Test. In terms of this particular game, we put a plan in place before the tour."

That plan was to play Phil Waugh as openside flanker after Smith's long-time rival for the position usurped Smith from the Test line-up for the last two matches of the Tri Nations tournament.

Even still, few would have expected there'd be no room on the bench for a player widely considered to be the second-best openside flanker in world rugby.

But there wasn't, with Hoiles, a No.8, recalled after two years in the Test wilderness.

"We thought Waugh's form was very strong in the New Zealand Test and, for this particular Test, Hoiles' lineout ability off the bench (gave him the edge)," Connolly said.

"That doesn't mean we may not go for the two shorter guys (Waugh and Smith) in the future, but it does take some reconfiguring in the lineouts.

"We need to work that through in terms of who we're playing."

"I suppose with (starting No.8) Cliff Palu having not played for the last couple of months, we thought we'd take a specialist No.8 knowing there's the chance that over the last 20 minutes he may fade a shade."

Compounding Smith's misery was Connolly's naming of Waugh as Wallabies skipper for Saturday's Test in the injury-enforced absence of tour skipper Stirling Mortlock.

"Phil has been a great contributor to Australian rugby for a long time. He's one of those players who wears their heart on their sleeve and we are thrilled he has got the opportunity to captain his country," the coach said.

Waugh, making his 53rd Test appearance, described his elevation as "very exciting".

"When you look at the calibre of players that have captained Australia in history of Australian rugby, it's a huge honour to join those guys," the 27-year-old said.

Waugh becomes Australia's 74th Test captain.

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