The All Blacks reflect on their defeat. (Gety Images)

New Zealand coach John Mitchell has insisted he would not resign after the All Blacks tumbled to a shock World Cup semi-final defeat.

Australia upset the form, and no doubt the bookmakers too, by turning in a sensational defensive display that kept the dangerous All Blacks in check.

It is the second time in as many World Cups that New Zealand have entered the World Cup semi-finals as hot favourites, but left as losers.

In 1999, the All Blacks were beaten by France at Twickenham and returned home to find the word 'losers' daubed on their luggage as it came through on the carousel.

Coach John Hart quit because of the "intense public scrutiny" and was treated like a pariah by a New Zealand public who take their rugby more seriously than any other nation on earth.

But Mitchell stated he would not be stepping down after the 22-10 defeat to Australia in Sydney.

"I love coaching. They are a fantastic group and there is no hint of me handing in my resignation or anything like that," he said.

"That's up to my employers and the person they want to take New Zealand rugby forward in 2004.

"I'm accountable for this team and that performance. There are no excuses. We didn't get it right tonight. I feel sorry for the fans in New Zealand but we feel twice as bad."

Mitchell rejected claims the All Blacks were perennial "chokers" after their defeats in the 1995 World Cup final and the semis in 1991, 1999 and now today.

Stirling Mortlock got Australia moving with an intercept try just moments after the television official declined Mils Muliaina's claims down the right wing.

Although All Blacks skipper Reuben Thorne responded with a score of his own, Elton Flatley's five penalties kept New Zealand at bay.

Mitchell said Australia had "won the inches" and that proved telling in a tight game where the Wallabies edged the possession, the All Blacks the territory.

"We didn't choke at all. That's just a bit of a buzz-word that goes around. We just got beaten by the better team. They were forceful in the breakdown. Our execution was poor and we did not deserve victory," he said.

"I'm very disappointed but the effort we put in was huge, things didn't go for us. But these things can happen in a career and we've got to get over it.

"We tried to come back but our execution of skill in the carry and the tackle was not good. A lot of slow ball ends up being no ball. We were stopped from playing and you've got to give Australia credit for that."

It was, in some ways, a mutual appreciation society with Wallabies coach Eddie Jones paying tribute to the strides taken by New Zealand this year.

They are Tri-Nations champions, Bledisloe Cup holders and Jones believes they have set the mark for all other teams.

"We have learnt a lot from New Zealand this year," he said.

"New Zealand set the standard for world rugby. They played with width, rhythm, tempo.

"The scoreboard this season still reads 2-1. We were good enough tonight, but don't lose sight of the fact that New Zealand have set the standards."

But Jones was delighted with the way his side reacted to what they came up against and shut it down in a manner no side has managed yet this World Cup.

"Our defence in the World Cup has been pretty good. We managed to foil their go-forward runners and I am reasonably pleased with the defence," said Jones.

"We played well, every individual played well, we put the bits and pieces together to beat a very good New Zealand side.

"The guys implemented the gameplan very well, they made adjustments, they made decisions and credit to the players for playing a great game.

"New Zealand have continued to develop their game this year, as have we. We found areas of their game that we could exploit tonight.

"I wouldn't be too critical of New Zealand, they have played some fabulous rugby this year."

Captain George Gregan before the game had called on his men to follow in France's footsteps and pull of an upset, though to do that he realised every Wallaby had to turn in a committed, 80-minute performance.

That is what he got.

"The most pleasing aspect was that everybody needed to do their job in our 22 (man squad). And everybody needed to do that to get the job done," he said.

"The most important thing is belief in the team. New Zealand were the world's best team this year, so it was a great effort. Semi-finals are about pressure. We handled that well.

"It has given us the opportunity to play for the ultimate prize."

Gregan was delighted the defensive work the Wallabies had done all week paid dividends.

"Defence wins big matches at the end of a tournament," he said.

"And they have some very dangerous players, Carlos, Justin, every single one of their backline. You have got to get off the line otherwise they get good go-forward.

"You have to make them work. It paid off later in the game as they started to fatigue."

Offensively, both fly-half Stephen Larkham and Mortlock were particularly impressive.

"I thought Stevie was absolutely outstanding. He read their defensive patterns very well and shifted the ball wide very well. That's probably his best World Cup performance," said Jones who will have to wait until the morning to assess Australia's lengthy injury toll.

"Tonight Stirling showed the running skills that make him such a good player."