Captain Paul Collingwood blamed England's batsmen as their record run of Twenty20 victories was ended by a four-run defeat against Australia in Melbourne.
The tourists narrowly failed to chase down Australia's 147-7 after a mid-innings malaise that Collingwood was certain cost his team a ninth successive victory in the shortest form of the game.
After Ian Bell and Steven Davies had set the platform for victory with an opening stand of 60 from 46 balls, England's run-rate slowed appreciably as they managed just 53 runs in the next 10 overs, while also losing six wickets.
That left them needing 18 from Brett Lee's final over and while Chris Woakes kept up hopes with a six, Yorkshire's Tim Bresnan could not deliver a similar blow that was required from the last ball.
"We were quite happy at half-time with chasing down a score like that but we were 10 per cent or 20 per cent off our batting tonight," said Collingwood.
"I thought we could win, especially after the first six overs when Bell and Davies set a good platform for us.
"But we went through those middle overs and had a lot of dot balls. They resorted to bowling a lot of cutters into the wicket so it made it difficult for us to get the boundaries at the right time.
"We couldn't get the boundaries and started holing out after that.
"I think if we were given that score any time we'd want to chase that down."
While disappointed to see the end of his side's record run, which began during their successful World Twenty20 campaign last May, Collingwood denied that defeat represented any kind of setback ahead of the seven-match one-day series, which begins at the MCG tomorrow.
"We've had a good run of things in the Twenty20 format of the game. It's disappointing tonight not to have won the game," he added.
"We're all looking forward to the one-day series. I can safely say we are still playing some good cricket.
"We would have loved to have won tonight, but I don't think it has hit our momentum too much.
"We did some good stuff and we were just 10 per cent off the mark with the batting. (Andrew) Strauss takes over the reins again and we are looking forward to this series.
"It is a big series for us going into the World Cup."
Spinners Graeme Swann and Michael Yardy had earlier put the brakes on a brisk Australia start as they both returned figures of 2-19 from their four overs.
But where England failed to find the boundaries late in their innings Aaron Finch, playing just his second game, crucially did for the hosts after Swann and Yardy had bowled their allotted overs.
Finch's unbeaten 53 from 33 balls included four fours and two sixes and Collingwood admitted the 24-year-old's hitting had proved decisive.
"He hits a long ball. He hits it in good areas and he's a dangerous player," he said.
"He hits it pretty hard and he's a good fielder. It was a good innings. It shifted the momentum a little bit in their favour going into the halfway mark – he seems a good player."
The MCG is Finch's home ground for state side Victoria and he admitted local knowledge had helped him construct his match-winning innings.
"This ground is suited to orthodox cricket shots," he said.
"You've got short straight boundaries and wider square so it encourages you to play with good technique and hit through the line with good cricket shots.
"You get value for shots here when you play that way."
The victory was also the first for Australia's new Twenty20 captain Cameron White, after his side lost his debut game by one wicket on the final ball in Adelaide.
It was also only Australia's second win over England during a miserable winter that has seen the Ashes lost on home soil for the first time in 24 years.
"It (the win) is important, it beats losing for sure," said White
"I thought our score was about par or a little under but I also thought we had enough runs to win the game if we bowled and fielded well."
White hoped the win would also boost confidence ahead of the one-day games, adding: "It's a different format to the Tests and it's different to the one-dayers.
"You might be able to take something forward, but it's a new competition starting Sunday."
Lydia Greenway guided England Women to victory for the second consecutive match as they beat Australia by five wickets in a Twenty20 international in Melbourne.
Greenway struck an unbeaten run-a-ball 30 to see England past Australia's 99-3 with two balls to spare. England now lead the five-match series 2-0 ahead of the final three games in Canberra.