New Zealand won the fourth one-day international by one wicket off the last ball to take a 2-1 lead in the five-match NatWest Series.
The Kiwis needed two runs from Luke Wright's final delivery which Mark Gillespie hit straight to Graeme Swann in the covers.
A run-out looked certain but the spinner hurled the ball at the non-striking end, missed the stumps and, with nobody backing up, New Zealand ran two to seal the win.
The result provided poetic justice for the Black Caps, whose run chase was almost derailed by the controversial dismissal of Grant Elliott, run out following a collision with Ryan Sidebottom.
With 26 runs required, Elliott was knocked to the floor by Sidebottom, who ran across the batsman's path to field the ball in his follow through.
The South African-born all-rounder had bottom-edged into the pitch and was called through for a single by eighth-wicket partner Kyle Mills.
As he lay prone on the floor, Ian Bell scooped up the ball and threw to Kevin Pietersen, who removed the bails at the bowler's end.
England captain Paul Collingwood discussed the situation with umpire Mark Benson before deciding to uphold his side's appeal, although he admitted afterwards he 'may have made the wrong decision'.
That left New Zealand 220-8 in the 45th over and skipper Daniel Vettori clearly unhappy with events on the dressing room balcony - although both sides struck a measured tone in their post-match comments.
Styris rides his luck
The platform for New Zealand's successful run chase was laid by Scott Styris' innings of 69, although he was dropped three times, including a straightforward chance to Owais Shah at slip before he had scored.
He was also put down on 27 and 28 but helped his side reach 103-3 at the half-way stage of their innings.
Sidebottom, having recovered from the sore back that kept him out of the previous two games, claimed two early wickets to confirm his return to fitness.
Brendon McCullum (1) chased a wide delivery to Swann at first slip and Ross Taylor (6) soon followed after skying a slog straight up in the air.
Styris survived a third-ball chance off Anderson and responded by taking three fours in an over from Sidebottom.
The all-rounder had another let-off on 27 when Paul Collingwood failed to hang onto a diving chance at backward point off Stuart Broad's bowling.
And one run later Styris was given a third life when Broad failed to hang onto a caught-and-bowled chance.
The third-wicket pair of Jamie How and Styris put New Zealand in the ascendancy by adding 59 in 13 overs, but the introduction Swann's off-spin swayed the momentum back to England.
Swann held onto a comfortable return catch from How's (37) leading edge off the final ball of his first over.
And the game was back in the balance when Daniel Flynn (12) attempted a slog-sweep and only succeeded in gifting a catch to Ian Bell at midwicket to leave New Zealand on 106-4.
Styris was joined by the fit again Jacob Oram for what looked like being the decisive stand of the day - 67 off 51 balls.
But once again there was a twist as the pair both needlessly surrendered their wickets with the required-rate under control.
Oram had reached 38 off 30 balls when an attempted pull at the final ball of Anderson's 10-over spell was caught by substitute Alastair Cook on the square-leg boundary.
And Styris' luck finally came to an end on 69 when he was run out attempting a second run by Swann's throw.
Vettori (6) flicked Collingwood to short midwicket and then came the controversial finale which overshadowed the rest of the day.
Earlier, half-centuries from Shah and Ravi Bopara had helped England reach a disappointing total of 245 all out in 49.4 overs after Vettori asked them to bat.
Paceman Tim Southee, playing in just his fourth one-day international, was the pick of the bowlers with 3-47.
Openers Bell and Wright put on 41 in nine overs before England lost two wickets in the space of five balls.
Mills made the first breakthrough when Wright (18) fell to a stunning one-handed catch by Taylor at short midwicket. Pietersen lasted just two balls before top-edging a pull to Southee off Gillespie's bowling.
Bell looked in fine form but yet again he failed to fully capitalise on a good start - the Warwickshire batsman fell to a careless shot on 46 when his attempt to guide Southee down to third-man resulted in an edge through to wicketkeeper McCullum.
Collingwood (14) bottom-edged a delivery from Southee onto his stumps and it was left to Bopara (58) and Shah (63) to put on 75 in 16 overs - before the last five wickets fell for 43 runs in eight overs.