The London Olympics was a chance to raise the profile of basketball in Britain, where it is still at best a marginal sport, and prove they could compete in the major leagues.
But a home team based around Chicago Bulls forward Luol Deng and a handful of players from the Spanish, Turkish and US college leagues blew a 15-point lead and their chances of making the knockout stages with a 106-75 defeat.
Ranked 43rd in the world, the British took Brazil (13th) and Spain (2nd) to the wire earlier in the tournament and can look forward to their third European Championships in a row with hopes of improving on last year's 13th place.
But they and China are both 0-4 ahead of a final game between the two that will only be for pride.
"We are bitterly disappointed," forward Drew Armstrong said.
"But we have things we can take from this. We played tough games. There is a lot of talent in the British game and I think we showed that.
“We played really well first two quarters. They made their scoring shots and we missed a bunch.
“We're learning to fight; we need to learn quickly. We're a close group and we've really tested ourselves in these games."
Australia, who disappointed against Brazil and Spain, were inspired by a 39-point haul from San Antonio Spurs guard Paddy Mills.
They are now looked poised to play face the United States in the quarter-finals after winning the second half of Saturday's game 70-29 on the back of an energetic defensive performance.
"In any sport, you need someone to grab the game, to really step up and he (Mills) really did that tonight," team coach Brett Brown, also an assistant coach at San Antonio, said.
He refused to be drawn on Australia's prospects against a US side that has won every game, but was run close by Lithuania on Saturday.