An undefeated 105 for Shane Watson and a dropped catch saw Australia retain the ICC Champions Trophy when they beat New Zealand by six wickets in the final at Supersport Park on Monday.

Although it was a convincing victory, New Zealand put up a dogged fight and at times, it even appeared that their dreams of victory might come true.

After posting a very modest total of 200, the Black Caps' hopes soared when they got rid of Tim Paine and the dangerous Ricky Ponting in the first three overs - Paine brilliantly caught in the slips by Ross Taylor, who dived to his right to send Paine back for one, courtesy of Shane Bond.

Ponting was plumb lbw to Kyle Mills, also for one, and for a while it looked as if the Black Caps were going to pull off a remarkable victory over the defending champions.

Bond and Mills, in particular, bowled very tightly and Shane Watson and Cameron White had difficulty getting them away. By the end of the 15th over, Australia had managed to score just 34 runs and Kiwi hopes were high.

The turning point of the match came in the 18th over. White top-edged a delivery from Ian Butler, and the ball went high into the air. Wicketkeeper Brendon McCullum got into position beneath it - and the ball slipped through his gloves. White was on 21, and Australia on 47 for two.

A wicket at that stage could have made all the difference. White hit the next ball for four, and the two Australians began scoring more freely than they had done throughout the match.

They put on 73 runs off 195-balls before Mills managed to break the partnership with an excellent delivery which cannoned into White's wicket off the toe of his bat. He made 62 in two hours and 20 minutes off 102 balls, hitting seven boundaries and a six.

Stand-in captain McCullum did everything he could to change the course of the game, even bowling his two frontline bowlers out before the batting power play, but the Australians were unstoppable.

It wasn't a pretty performance by the champions, but they did exactly what they needed to do to retain the trophy.

With Australia needing seven to win, Watson hit Patel for two successive sixes to add a second undefeated century to the 136 not out he made in the semifinal against England on Friday. He was not out on 105.

New Zealand suffered a major blow before the start of the match when their charismatic captain Daniel Vettori - man of the match in the semi-final against Pakistan - had to withdraw because of a torn hamstring. He was the fourth major player in the New Zealand squad to suffer an injury, after Jacob Oram, Daryl Tuffey and Jesse Ryder.

That New Zealand got as far as they did is largely thanks to Vettori's inspirational leadership.

New Zealand struggled to their total of 200 for nine and at one stage, they were 94 for five. Several players got starts but failed to consolidate, and there were only two major partnerships, with Martin Guptill and Aaron Redmond contributing 61 for the second wicket and Neil Broom and James Franklin sharing a sixth wicket stand of 65.

Nathan Hauritz was the most successful Australian bowler, taking three wickets for 37 runs, while Brett Lee took two for 45.

Ricky Ponting was named Player of the Tournament as well as receiving the Golden Bat award, while South Africa's Wayne Parnell won the Golden Ball for the best bowler of the tournament.