Click here to read Martin Johnson and the players' reaction.

The teachers of Australia, South Africa and New Zealand have finished educating their English pupils on the basics of international Test rugby; do not concede soft penalties and grasp your opportunities when they come.

Martin Johnson's men were much improved from their mauling at the hands of world champions South Africa the previous week, even valiant in their heart and effort but they still have much to learn.

They succeeded in making the All Blacks look ordinary for long periods with a performance full of character and determination, but it was undermined by the needless concession of penalties and an inability to convert chances.

And just when England had a foothold in this first contest for the Hillary Shield – in honour of mountaineer Sir Edmund Hillary – New Zealand cut the rope to secure a third grand slam of the home unions.

It will go down as another lesson learned in what has been a long November in the classroom for Johnson's young side.

First Australia, then, in record-breaking fashion, South Africa, and now the All Blacks have all taught this inexperienced England team that their promise remains a long way from fulfilment.

England are repeatedly guilty of indiscipline, and failing to react maturely enough to refereeing decisions.

Finding a balance between aggression and playing to the letter of the law, is a fine line that needs fine tuning.

After an absorbing opening quarter when England more than matched their much-vaunted opponents with ferocious tackling, the initiative was surrendered by the concession of a string of unnecessary infringements.

Alain Rolland's eagerness to blow the whistle did not help matters but a word that has cropped up time and again over the past month on this steepest of learning curves for England has been 'streetwise'.

They again showed their incapacity to deal with refereeing decisions as New Zealand built a 12-3 half-time lead without having ventured into the hosts' 22.

It could easily have been more, had Dan Carter – the finest fly-half on the planet – not booted two penalties wide.

He did hit the target with four, as England were pulled up for a succession of penalties from hands in the ruck to offside.

England had four men sent to the sin-bin, New Zealand had none. Beating the All Blacks is hard enough with 15 men, trying to do so with 14 is impossible.

Lee Mears was the first to go, quickly followed by James Haskell for foul play.

Johnson's men set about rebuilding a reputation damaged by the Springboks last week with some fierce tackling, Michael Lipman particularly relishing the opportunity to square up to opposing openside flanker Richie McCaw with an early assault.

Phil Vickery similarly led from the front, bulldozing his way through the resistance as England built their attacks on their forward strength.

Toby Flood tried manfully to lead his side, missing and then scoring early penalties, before a nervy long-range drop goal fell short.

At the start of the second half, a run by Delon Armitage caught the All Blacks cold and only a last-ditch tackle on Nick Easter denied England a try between the posts.

That was to be another lesson learned; failure to take chances at Test level will be punished. Almost immediately, Flood was sin-binned for a high tackle on Conrad Smith. Tom Rees would follow towards the end.

Johnson's half-time orders were clear; hit the All Blacks and hit them hard.

Haskell poleaxed a marauding Joe Rokocoko and then Danny Care went in with a high challenge after the play had passed.

The mentality worked. Armitage showed he is one of the younger stars benefitting from this southern exposure with a well-placed penalty.

But just as England looked to be getting on top, the world's
No 1 rugby union team reached out and snatched the momentum.

From an England scrum 10 metres out, New Zealand's forwards spun play their way, the ball was moved with lightning pace from Nonu to Rokocoko and then to Mils Muliaina, who capped a wonderful move with a dive in the corner.

Carter might have been off cue with his place-kicking, but he set up the second and decisive try with a brilliant sideways chip that allowed Muliaini an untouched route to the tryline.

Nonu then raced through from midfield with a lung-busting run, completing the final lesson for England.

"We are disappointed but the fact that we lived with the world's best for 50-60 minutes is something to take from the game," said Leeds-born Care.

"We know that playing at this level you have to take your chances. We have got to be a bit smarter about how the referee reacts to certain things on the pitch."

Headmaster Johnson has much to work on when his pupils return for the start of the next term.

England: D Armitage, P Sackey (Hipkiss 73), J Noon (Cipriani 75), R Flutey, U Monye, T Flood, D Care (Ellis 61); T Payne, L Mears (Hartley 67), P Vickery (Stevens 53), S Borthwick, N Kennedy, J Haskell, M Lipman (Rees 58), N Easter (Croft 67).

New Zealand: M Muliaina, J Rokocoko, C Smith (Toeava 69), M Nonu, S Sivivatu, D Carter, J Cowan (Weepu 70); T Woodcock, K Mealamu, N Tialata (Afoa 55), B Thorn (Boric 69), A Williams, J Kaino (Read 55), R McCaw, R So'oialo. Replacements: H Elliott, S Donald.

Referee: A Rolland (Ireland).