Tri-Nations/New Zealand - 31 South Africa - 27: South Africa's rugby players departed New Zealand on Sunday resigned to losing their Tri-Nations crown but confident they were on the right track to winning an even bigger title in two years' time.
Jake White's youthful Springboks pushed the New Zealanders all the way before conceding a late try to go down 31-27 at Dunedin's "House of Pain".
Victory would have secured back-to-back Tri-Nations titles for South Africa but the title now seems certain to go to the All Blacks, as long as they win next week against an injury-depleted and out-of-form Australia.
White said he was disappointed by the loss but the performance was a further sign his team were looming as serious contenders for the 2007 World Cup.
After slumping to sixth on the world rankings after their quarter-final exit at the 2003 World Cup, the Springboks have been the most improved team in world rugby in the past 12 months.
They began this season with a series win over France then racked up three straight wins over the Wallabies before splitting their home and away matches with New Zealand.
"To go from sixth in the world to two in the world in the matter of 18 months is something they can be proud of," White said.
Springboks captain John Smit also said there were more positives than negatives from the performance against an All Blacks side that is ranked number one in the world and demolished the Lions earlier this season.
"We can take heart from the fact that we're getting closer and closer," Smit said. "It's good for us as a young side to know that we're getting better and better."
The scoring started in the second minute, with Percy Montgomery kicking a penalty after French referee Joel Jutge penalised the hosts at the ruck.
However, New Zealand hit back within minutes, putting South Africa behind for the first time in the Tri-Nations.
Springbok outhalf Andre Pretorius had his kick charged down by centre Aaron Mauger and Joe Rokocoko's pace saw him home.
The advantage was lost almost immediately. In the ninth minute, Bryan Habana found space on the left after New Zealand lost the ball in the ruck.
Percy Montgomery added the extra points but after 20 minutes, the fullback erred to hand the game back to their hosts as Leon MacDonald, Graham Henry's replacement for Dan Carter, then scored under the posts and converted his own try.
New Zealand extended their lead five minutes later, Rokocoko exploiting weak tackling by the South Africans to bulldoze through after picking up the loose ball. MacDonald converted.
White was handed a fright in the 33rd minute, when Schalk Burger clashed with Pretorius while tackling Umaga.
Burger went off, emerging only in the second half, but Pretorius was removed with a serious-looking leg injury, to be replaced by Jaco van der Westhuyzen.
Springbok fortunes changed within seconds of half-time. Piri Weepu cleared the ball to MacDonald, but a quick-thinking Rick Januarie charged down his clearance and dotted down.
The Springboks, reinforced by Burger, were rampant in the opening exchanges of the second period but their dominance was only rewarded with a 51st-minute Montgomery kick.
MacDonald padded New Zealand's cushion to 24-20 after an hour with another three-pointer, but South Africa's famed perseverance then became apparent.
Januarie intercepted a Jerry Collins pass and fed Jaque Fourie to score under the posts, setting up an easy conversion.
With the title slipping away, New Zealand stepped up the pace. In the 74th minute, Weepu crossed the line but the video referee ruled correctly the ball had been lost as he touched down.
And with five minutes to go, Keven Mealamu scored to give New Zealand the victory, with Luke McAlister converting.
New Zealand flanker Jerry Collins was suspended yesterday for two weeks for punching South Africa replacement Jaco van der Westhuyzen in Saturday's Test.
Collins was cited by an independent match official for punching van der Westhuyzen during a wild brawl that erupted in the second half .
The ban means Collins will miss next weekend's final and decisive Tri-Nations clash with Australia.
NEW ZEALAND: Muliaina; Gear, Umaga (capt), Mauger, Rokocoko; MacDonald, Weepu; Woodcock, Mealamu, Hayman, Jack, Williams, Collins, McCaw, So'oialo, .
SOUTH AFRICA: Montgomery; de Villiers, Fourie, De Wet Barry, Habana; Pretorius, Januarie; du Randt, Smit (capt), van der Linde, B Botha, Matfield, Smith, Burger, van Niekerk.
Referee: Joel Jutge (France)