It was a case of close but no cigar for the Blues as the struggling Super Rugby outfit went down 30-27 to the Highlanders in Dunedin on Friday.
The men from Auckland are now really staring down the barrel after suffering their fifth successive loss, and seventh defeat of the season.
Both sides crossed the whitewash twice, while the battle of the boot between pivots Mike Delany and Gareth Anscombe kept the scoreboard ticking over and proved to be the difference in the end with the former winning the kicking duel.
The visitors had a chance to draw the game in injury time, but new skipper Luke Braid opted for the win instead and was made to rue that decision as the Highlanders managed to hold off a last-gasp onslaught from their New Zealand rivals.
The Highlanders knew they had a game on their hands after the Blues made the best possible start thanks to a try in the corner by full-back Hadleigh Parkes three minutes into the match.
It was the result of a Highlanders error and quick thinking by Ma'a Nonu who pounced on a dropped pass by Shaun Treeby, broke a tackle and from an ensuing ruck, the ball was spread wide to Parkes for the opening score.
Anscombe failed to add the extras from far out and the Highlanders hit back with a try to Treeby - the centre making amends for his earlier blunder. Hosea Gear took a clever inside pass from Delany, drew the defence and linked with Treeby who had a clear run to the line.
Delany was more successful with his touchline conversion and then added his first penalty of the match minutes later to extend the lead to 10-5.
Delany increased his team's lead even further with his second penalty (13-5), but Anscombe closed the gap with his first three-pointer from bang in front before adding another to make it 13-11 after 28 minutes.
Anscombe was able to put his side back in front (13-14) with his third successive penalty, but the lead changed hands once more before half-time thanks to Delany's accurate boot when Nonu was caught in possession under his own posts.
So at 16-14, the Highlanders went into the break in front.
The see-saw battle continued in the second half, with Anscombe and Delany trading four penalties between them until the Highlanders went ahead 22-20 as Bryce Lawrence's whistle continued to dominate.
Blues coach Pat Lam replaced Alby Mathewson for the under-fire Piri Weepu, but the All Blacks halfback made an immediate impact after putting Rene Ranger over from close range. Anscombe converted and the Blues led 27-22.
Delany kicked his sixth penalty after a frantic Highlanders attack and the Blues led by two points going into the last quarter of a thrilling encounter.
But the Highlanders ultimately had the last laugh when the southerners resolutely pegged back that advantage and replacement Kurt Baker forced the final lead change when he doggedly pursued Gear's kick which Ranger had knocked back over the visitors' tryline. Baker dived on the loose ball to score, Delany missed the conversion, but the Highlanders were in front with 10 minutes left to play.
And the rest, as they say, is history.
It was the Highlanders' first win over the Blues since 2006, and their sixth victory of 2012 that lifts them to fourth place on the overall standings.
Tries: Treeby, Baker
Pens: Delany 6
Tries: Parkes, Ranger
Pens: Anscombe 5
Highlanders: 15 Tamati Ellison, 14 Kade Poki, 13 Phil Burleigh, 12 Shaun Treeby, 11 Hosea Gear, 10 Mike Delany, 9 Aaron Smith, 8 Nasi Manu, 7 James Haskell, 6 Adam Thomson, 5 Jarrad Hoeata, 4 Josh Bekhuis, 3 Chris King, 2 Andrew Hore, 1 Jamie Mackintosh (c).
Replacements: 16 Jason Rutledge, 17 Ma'afu Fia, 18 Doug Tietjens, 19 Culum Retallick, 20 Jimmy Cowan, 21 Chris Noakes, 22 Kurt Baker.
Blues:15 Hadleigh Parkes, 14 George Moala, 13 Rene Ranger, 12 Ma'a Nonu, 11 Benson Stanley, 10 Gareth Anscombe, 9 Alby Mathewson, 8 Peter Saili, 7 Luke Braid (c), 6 Chris Lowrey, 5 Filo Paulo, 4 Ali Williams, 3 Charlie Faumuina, 2 Tom McCartney, 1 Tony Woodcock.
Replacements: 16 James Parsons, 17 Tevita Mailau, 18 Liaki Moli, 19 Dan Braid, 20 Piri Weepu, 21 Michael Hobbs, 22 David Raikuna.
Referee: Bryce Lawrence (New Zealand)