After the Black Caps made the third highest limited-overs score at the WACA and their best total against England with 318 for seven, England made 260 for eight in reply on Tuesday.
The result means New Zealand are five points ahead of England on the tri-series table, with four points available for a win, and both sides having two games left.
The English, with only one win all tour and just eight in their last 33 one-day internationals, need to win their last two games against Australia and New Zealand to have any realistic hope of reaching the finals.
But England captain Andrew Flintoff, who hasn't tasted victory as skipper in five Tests and four one-day internationals on tour, said they had not given up on their finals chances.
"We have to concentrate on winning two," he said.
"We have a game against Australia on Friday, we've not beaten them yet and it would be nice to start this Friday."
New Zealand captain Stephen Fleming said his side was disappointed not to secure a bonus point against England, but confident of reaching the tri-series finals.
"They've been enhanced pretty well today," he said of New Zealand's finals prospects.
"It would have been nice to win the game emphatically and get a bonus point from it ... we should be good enough to get to the finals."
England started well enough in their long chase, with Ed Joyce promoted to open the batting and making an impressive 66.
However, spinner Daniel Vettori (2-40) broke the English resistance.
Andrew Strauss' horror tour continued when the left-hander, dropped to number four, charged down the pitch at Vettori, miscued an attempt to kick the ball away and was stumped by Brendon McCullum for 12.
The departure of Flintoff, bowled around the legs by Vettori, ended their hopes as they slumped to 162 for six.
The final winning margin flattered the English greatly, with Paul Nixon (49) and Liam Plunkett (25 not out) scoring cheap runs as New Zealand dropped their intensity.
Earlier, both Lou Vincent and Ross Taylor made half-centuries in the New Zealand innings, while Jacob Oram again weighed in with some more late fireworks.
But it was another calamitous display in the field from the embattled English.
They conceded a staggering 37 sundries, including 22 wides and three no-balls, which also gave the Black Caps plenty of extra deliveries to face.
England's fielding was substandard, with two dropped catches and several boundaries coming as a result of fielding blunders, the main culprit being Liam Plunkett.
As well as his poor fielding, the pace bowler also went for 72 runs from his 10 overs, including three no-balls and five wides, to complete a terrible day at the office.
After Vincent made 76 and Taylor 71, Oram continued his incredible form since returning from a hamstring in making an unbeaten 54.
Oram faced just 33 balls, hitting three fours and four sixes to help his side make a late surge.
"He continued that form he is in and just took the game away from us," Flintoff admitted.
Oram then had a scare in the field, landing heavily and leaving the field after taking a fine diving catch on the boundary -- which didn't stand as it came off a no-ball. But the New Zealander returned later in the innings.
One of the few England players to impress was spinner Monty Panesar, who helped rein in a flying start by the Kiwis with just 15 runs coming from his first six overs, finishing with 2-35 from 10.
New Zealand 318 for 7 in 50 overs (Lou Vincent 76, Ross Taylor 71, Jacob Oram 54 n o; Plunkett 3 for 54, Panesar 2 for 35) beat England 260 for 8 in 50 overs (Ed Joyce 66, Paul Nixon 49, Ian Bell 31; McMillan 2 for 38, Vettori 2 for 40, Shane Bond 1 for 45)