Captain Paul Collingwood admitted England's most humiliating defeat in limited-overs history was hard to stomach.

The Dutch scraped home on the last ball of the World Twenty20 at Lord's via a Stuart Broad overthrow to thrust English hopes of progressing to the latter stages into grave doubt.

Following the four-wicket loss, England must now beat Pakistan at the Oval on Sunday to realistically retain their chance of progressing from Group B.

Holland, meanwhile, answered captain Jeroen Smits' pre-match rallying cry to prove they were worth a place in the Friends Provident Trophy alongside fellow associate countries Ireland and Scotland.

"That's pretty hard to take," said Collingwood. "You call these sides minnow sides but tonight they have thoroughly deserved their victory."

Smits, whose men are now contemplating having to extend their unpaid leave to represent their country here, said: "We deserve to play in the Friends Provident Trophy - I don't know any cricketing reasons why we are not in that competition.

"This result speaks for itself, doesn't it? It's a huge victory. Without doubt, the biggest day in Dutch cricket history, and now we are looking to qualify for the Super Eights and maybe the semi-finals.

"We will all have to get more time away from work - it will cost us a lot of money - but I would love to take some days off."

England failed to defend 162 for five in wet conditions as Tom de Grooth smashed an enterprising 49 and Peter Borren hit 30; the Dutch also crucially won the six count in the contest 4-0.

"We thought we had enough runs on the board but they came out and played with plenty of freedom and belief," reflected Collingwood.

"The way they knocked the runs off was mightily impressive. We were beaten by the better side. Full credit to them.

"Their batting did surprise us. The way they went about their cricket was well planned. Every time we got a wicket we thought we were on top but every batsman that came out seemed to score boundaries from ball one."

The only panic surfaced in the final over which Stuart Broad began with seven required by the men in orange.

Three missed run-out chances - including one from the final ball - and a dropped catch cost England, without Kevin Pietersen due to an Achilles problem, dear.

"Batting-wise we played to our capabilities," said Smits, whose side were intent on using their $100 daily allowance on celebratory drinks in the bar.

"Twenty20 is all about momentum and at half-time we spoke to the batsmen in the dressing room and said: 'We are going to do it today'.

"I would rather be 80 all out than 130 for five, so I told them to play hard, play their shots and they had nothing to lose."

Their batting was a stark contrast to that of England, whose failure to clear the ropes or build on a record first-wicket stand of 102 by Luke Wright (71) and Ravi Bopara (46) was also of concern.

"Wright and Bopara at the top of the order really set us a platform but the rest of us got out pretty cheaply when we should have got a score of 180," Collingwood said. "It was hard to explain. I don't know the reason why.

"The batsmen kept coming in and found it hard to get the pace on the ball and clear the ropes.

"But we are still in the tournament. We have got 24 hours to get our heads around it."

Pietersen was left out due to a flaring of his Achilles problem but England hope he can feature in the crunch match with Pakistan.

"You always miss a player like that," Collingwood reflected. "Obviously for his experience but also for his power-hitting as well.

"He woke up this morning and felt very sore, which was a surprise to him and a surprise to the rest of us.

"Hopefully he is going to be fit for Sunday because this is now a must-win game for us."

England may also rue the decision to pick Yorkshire leg-spinner Adil Rashid ahead of the in-form Graeme Swann.

But Collingwood said: "We all know what Adil can do. It's a gamble on experience but not on the skills he has got."