Title defenders England battled hard against New Zealand but went down 21-16 in the World Rugby U20 Championship final at Cremona Stadium, with all of their points coming from two Bath Academy players.
Despite a strong start and an early score by centre Max Clark, England found themselves 11-10 down at half-time as penalties proved costly and New Zealand began to gain momentum.
The Baby Blacks extended their lead early in the second half when No. 8 Akira Ioane drove over the line. England responded with six crucial points from the boot of Rory Jennings as they continued to pressure the New Zealand defence but, with decisions not going their way, it became a race against the clock.
Head Coach Jon Callard said: "I am honoured and privileged to be in a position to be talking about such fine young men. They have been a great advert for the game and great ambassadors for their clubs and country. I can't speak highly enough of them and I know that a lot of them will go on to further honours.
"We were the smallest of margins away from finding the solution there, if it had gone on for another ten minutes we may have snuck it but we couldn't quite adapt and deliver that one play in the crucial moment that would have made the difference and we will learn from that moving forward.
"We are hugely disappointed with the result of this match but massively pleased with the way the lads have dug in and played some great rugby during the tournament.There is real talent in this group and I'm sure they will be pushing hard for places in the senior side in years to come.
"New Zealand defended well and were aggressive in the tackle. In the end they got the upper hand in the breakdown, they managed to slow us down and prevent quick attack."
Fly half Jennings said: "We're devastated, lost for words really. It was such a tough match, both sides going hard at it and fair play to them for coming away with the victory. I am so proud of the boys though, they put in a massive effort this evening. We knew there was one score in it and we needed to keep the pressure on them, play in the right areas of the field but on the occasions that we forced it a bit they capitalised."
Try scorer Clark added: "In the team huddle at the end we acknowledged that although we are hurting now, we have to remember how far we have come as a squad. Our journey started in the Six Nations, we showed resilience to bounce back from that result against France last week, we fronted up this evening and now we will push on as individuals and as a strong group of friends."
England couldn't have asked for a better start with Clark scoring in the first five minutes, cutting a great line to shoot through the New Zealand defence. Jennings added the conversion.
An exchange of penalties followed with Otere Black putting New Zealand on the board before Jennings extended England's lead following an exciting piece of attacking play.
England continued to push for a further score with Ellis Genge's strong carries leading the charge, but against the run of play New Zealand made their first concerted attacking effort and Vincent Tavae touched down in the corner.
After failing to break down the wall of white in the midfield New Zealand kicked for the corner and from the resulting play earned a penalty and Black put his side ahead for the first time, 11-10.
England enjoyed a brief attacking spell after the break but their opponents soon rediscovered their rhythm, edging through the 22 with composed phase play until No. 8 Te Toiroa Tahuriorangi was able to drive over the line.
Two crucial Jennings penalties followed as England reduced the deficit to two points and they were unfortunate not to regain the lead when individual brilliance from Howard Packman set up Piers O'Conor. The try was disallowed, however, as the replacement full back was deemed offside by the TMO when Packman chipped to start the attack.
A further penalty from Black kept New Zealand in the driving seat as far as the score board was concerned but possession and momentum was with the England attack.
It looked like England had been given a lifeline when Black missed a penalty with four minutes left to play, after Jennings had earlier also sent one wide, but despite a determined effort until the whistle England couldn't quite break through the Baby Blacks' defence for that final score.
Points: Clark 1T, Jennings 1C and 3P
England team v New Zealand
15. Aaron Morris (Saracens)
14. George Perkins (Saracens)
13. Nick Tompkins (Saracens)
12. Max Clark (Bath Rugby)
11. Howard Packman (Northampton Saints)
10. Rory Jennings (Bath Rugby)
9. James Mitchell (Sale Sharks)
1. Ellis Genge (Bristol Rugby)
2. Jack Walker (Yorkshire Carnegie)
3. Paul Hill (Yorkshire Carnegie)
4. Will Witty (Newcastle Falcons)
5. Charlie Ewels (Bath Rugby, Captain)
6. Lewis Ludlam (Northampton)
7. Will Owen (Leicester Tigers)
8. James Chisholm (Harlequins)
16. Jack Innard (Exeter Chiefs)
17. Sebastian Adeniran-Olule (Harlequins) on for Genge (54 mins)
18. Ciaran Parker (Sale Sharks) on for Hill (78 mins)
19. Kieran Treadwell (Harlequins) on for Witty (54 mins)
20. Sam Skinner (Exeter Chiefs) on for Owen (75 mins)
21. Will Homer (Bath Rugby) on for James Mitchell (50 mins)
22. Lloyd Evans (Gloucester) on for Rory Jennings (71 mins)
23. Piers O'Conor (Wasps) on for Morris (32 mins)