The Aussie Sharks pushed world No.1 Serbia to the brink of defeat before going down 10-9 on Friday in their third and final group-stage match at the world water polo championships in Kazan, Russia.
The Australian men came from two goals down three times to get within a score of levelling the match, and then led with a quarter to play after a stunning four-goal run in the third period.
But the Serbs showed their class coming from behind with a fourth-quarter blitz of their own before several controversial decisions went against the Sharks.
The result, a stark improvement on a 12-8 loss to the Serbs at the World League Super Finals in June, augers well for the knockout stage of the tournament.
The Australians will have to wait until after the Montenegro-Japan game to find out where they finish in their group. Depending on that result, they will play South Africa or Kazakhstan on Sunday in an elimination group crossover game.
Australian coach Elvis Fatovic ended the game with a yellow card after protesting against two late refereeing calls, but refused to blame the match officials, instead heaping praise on his team, singling out goalkeeper Joel Dennerley.
"It was close to the best you can play without winning against a top side like that but you don't like when you lose a game in the last quarter," Fatovic said.
"We played again a good game and, like I said after the Montenegro game, you're not disappointed when you play 100 per cent against one of these teams. I think Croatia and Serbia are the best two teams in the world at this moment and we were close."
Earlier on Friday, the Australian Stingers qualified for the quarter-finals of the women's world titles after an 8-6 win over the Netherlands.
The win means Australia finish first in their group following earlier victories against Greece and South Africa, and they will play on Monday night (Tuesday AEST) for a spot in the semis.
The match was Australian captain Bronwen Knox's 300th cap, and she managed to bag a goal before being fouled out of the game close to the end.
"Personally, it wasn't the way I wanted it to end but, for the team, yes, it was great," Knox said.
"I would have liked to have stayed in the pool but the girls were there to do it without me and it was fantastic to see all the team come together.
"I wasn't nervous, I know all the work the girls have done for this and I had no doubt the girls would get in there and do the job."
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