Despondent New Zealanders reluctantly confronted the dreaded 'choker' tag Thursday after losing the America's Cup to one of sport's most stunning comebacks.

"Choke on this New Zealand," was the blunt advice on the country's most popular news website stuff.co.nz after Emirates Team New Zealand lost the regatta 8-9 to Oracle Team USA, despite leading 8-1 last week.

"It has been labelled the greatest comeback in the history of sport and it's hard to disagree," the Fairfax Media site said.

Prime Minister John Key tweeted a single word -- "Bugger" -- later describing the loss as "gut-wrenching".

"I think there will be an awful lot of New Zealanders who'll be sitting there with their heads in their hands," he told reporters.

The final race played out early morning New Zealand time and thousands gathered at bars and sailing clubs hoping for one last victory against the resurgent Americans.

But Philip Gaunt, who watched the entire marathon regatta at Wellington's Royal Port Nicholson Yacht Club, admitted he started the day with little optimism after Oracle relentlessly hacked away at the New Zealanders' lead for more than a week.

"If you're realistic it wasn't a surprise, but I'm disappointed that we got so close before losing," he said.

Yacht club patrons clapped politely as Oracle finished first, then rose to give Team NZ a standing ovation when they crossed the line 44 seconds later.

The defeat was all the more galling for New Zealanders because Oracle's skipper Jimmy Spithill hails from their arch-rival Australia, with media across the Tasman Sea rubbing salt into the wound.

The Sydney Morning Herald hailed Spithill as "the Aussie who sank a nation", while Melbourne's Herald Sun said "Aussies win miracle Cup for Yanks".

Meanwhile, The Guardian credited Oracle's British tactician Ben Ainsley with turning around the yacht's faltering campaign and pointed out that the winning team's multi-national crew contained only two Americans.

New Zealand's Radio Sports host Mark Richardson said Kiwi fans became emotionally involved as the battle for sailing's top prize dragged on, and would need time to get over the loss.

"We had our chances to win this thing, it was 8-1... (Oracle) came back from the dead, they improved their boat," he said.

"Did we choke? Did they beat us? I think it's a little bit of both."

Aucklander Trudie McConnochie said Team NZ should not be forced to wear one of sport's most unwanted labels.

"Everybody is using the word 'choke' but I think that's unfair. We lost to a better, faster team," she tweeted.

The government contributed NZ$36 million ($30 million) to Team NZ's campaign and Key said after the loss that there was no guarantee it would spend a similar amount for a future Cup tilt.

"There's a lot of things you have to consider before you put taxpayers' money on the line," he said.

Wellington sailing expert Matt Wood said the sporting public should not to blame Team NZ for the loss, saying they produced an error-free performance.

"It was decided on the technology behind the yachts," he said.

"We were out-resourced. It was a massive achievement to get where we did, given what we were up against."

TV1 commentator Peter Lester also believed the resources that software billionaire Larry Ellison provided the Americans was decisive, saying he poured everything into improving Oracle after the New Zealanders dominated the early races.

"The boss's toys have won the day," he said in commentary criticised by some on Twitter as sour grapes.

Wellington yachtie Gaunt said there was one positive he could take after rising early for weeks to watch the epic race, the longest in the America's Cup' 162-year history: "At last I'll be able to have a lie-in now."