Tom Jelte Slagter powered into the box seat to win the Tour Down Under finishing just behind Simon Gerrans on stage five.
The Dutchman (Blanco) went into the day with a five-second deficit to Team Sky's Geraint Thomas but powered clear of the Welshman in the final kilometre before battling it out with Gerrans (Orica-GreenEDGE) to the line.
It was the Australian, the winner of the race overall in 2012, who narrowly edged his wheel in front to take a popular victory on Australia Day, but it is Slagter who will look to ride into Adelaide with the ochre jersey on Sunday.
Javier Moreno (Movistar) was the next of the contenders home in third, moving up to second on the podium while Thomas had to be content with fifth overall, 29 seconds back, following a brave fight.
Edvald Boasson Hagen set the pace on the climb on behalf of his Team Sky team-mate but with just under a kilometre remaining a tired Thomas was left to shut down the gaps as attacks fired off the front.
At the finish, an overjoyed Slagter said: "I'm really really happy that I could do it today and it's a really big stage for the whole team. I felt good the whole stage and the whole week has been going well so I had all the confidence and it's great to be on the podium again and to be in the leader's jersey is incredible."
151.5km made up the decisive test as the peloton headed out from McLaren Vale on the Australian national holiday in front of a packed crowd.
Extensive and continuous attacks ensured the penultimate stage got off to an incredibly rapid start on the opening circuit, Team Sky pushing hard to keep the race together in the early going.
Seven riders were finally allowed clear after a prolonged battle, the peloton pronouncing themselves happy with the make-up of the move as the race settled back into a rhythm.
After Bernhard Eisel set the pace early on behalf of Team Sky other teams eventually came through to work in a bid to shut down the break, Blanco particularly active on the front as the pace shot up.
The break were finally reeled in as the peloton hit Old Willunga Hill for the first time, Team Sky taking the opportunity to re-assert their control as early attacks proved unfruitful.
As predicted sparks flew second time up the ascent, with Tiago Machado (RadioShack-Leopard) the first of the big names to hit out, followed by Moreno as Boasson Hagen kept things in check.
With the Norwegian used up, Thomas admitted he had no answer for the attacks that followed, telling Sky Sports after the stage: "The legs went with around 500 metres to go.
"The boys did a great ride and then Edvald did a good turn at the end. I should have just swung over maybe and got someone else to work but I ended up pulling for a bit and I was a bit empty after that. Gerrans came past a bit too fast for me to get on his wheel and I went backwards from there.
"Immediately afterwards you're pretty gutted you didn't get the win but when we get back tonight we'll see that we've got a lot of positives to take from this. It's the first race of the year and it's been a good week and a good start to the year."