A Billy Slater moment of madness and a controversial penalty try have combined to deliver New Zealand their first ever rugby league World Cup with a stunning 34-20 upset win over Australia in Saturday night's final at Suncorp Stadium.

Massive underdogs heading into the match, the Kiwis pulled off the biggest upset in World Cup history as the Kangaroos surrendered their No.1 ranking to their trans-Tasman rivals with their first loss since 2006.

The Aussies were left lamenting a series of blunders and a massive call from video referee Steve Ganson - the Englishman awarding the visitors a penalty try with ten minutes remaining which extended New Zealand's lead to beyond a converted try.

Adam Blair then confirmed the win with a try four minutes from time to revive memories of their memorable 2005 Tri-Nations final triumph.

Ganson ruled Australian winger Joel Monaghan had taken out Lance Hohaia as he chased through a Benji Marshall grubber, Slater's proximity to the incident giving doubt as to whether the Kiwi No.1 would have got to the ball first.

The Australians had just got themselves back into the contest when Darren Lockyer, who scored two tries, sent Greg Inglis over to cut the deficit to 22-20, coming after Slater's season of magic spontaneously combusted with a monumental brain-snap.

Slater, who had a stunning first half in which he set up tries for Lockyer and David Williams, chanced his arm one too many times with his flirtation with the touchline ending in disaster as he flicked the ball infield ten metres from his own line only to watch Marshall pounce and dive over for a 22-16 lead with just 19 minutes remaining.

It set up the sort of grandstand finish tournament officials had been craving after the Australians had romped though the preliminary rounds with massive winning margins over every opponent.

Fears of another landslide Kangaroo win evaporated after a committed first half from both sides.

The scene was set for an epic opening as the Kiwis got within centimetres of their opponents while performing their traditional pre-game haka, the emotion spilling over into several heavy hits early in the contest.

New Zealand were their own worst enemies early on with Marshall blowing an easy chance for an early try when he failed to ground a Nathan Fein grubber.

The Australians were not so charitable with Lockyer crossing for his first after Slater looked like he had butchered the opportunity when he elected to go himself.

Williams then ran away for a 10-0 lead but a denied try to Lockyer turned the contest with Jeremy Smith and then Jerome Ropati - after Marshall had been ruled to have been stripped of the ball - putting the Kiwis up 12-10.

Lockyer completed his double to restore Australia's advantage but it wasn't enough as the Kiwis flew home after the break to become the first side other than Australia to win a World Cup since Great Britain's win in 1972.

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