Morris Possoni led Team Sky home in 26th position after Luis León Sánchez had produced a powerful late kick on home soil to win the Clasica Ciclista San Sebastián.
The Caisse d'Epargne rider moved clear of an 11-man group with Alexandre Vinokourov (Astana) and Carlos Sastre (Cervélo) 40km from the line in northern Spain and the trio held a 25-second advantage as they neared the end of the undulating 243km loop.
Vinokourov had looked the stronger of the three as they swept back into the city centre and led out the sprint along the long closing straight, but Sánchez locked on to the Kazakh's wheel and jumped out from his slipstream in the final 50m to take the victory by half a bike length.
It was the 26-year-old's second Spanish victory in as many months after being crowned the national time trial champion on 25 June. Possoni meanwhile, crossed the line three minutes and 43 seconds behind in what remained of the much-splintered peloton. Juan Antonio Flecha (48th) and John-Lee Augustyn (81st) were the only other Team Sky riders to make it to the finish line.
The home-based riders had looked lively from the off and Xavier Florencio (Cervélo) joined forces with Pierre Cazaux (FDJ) and Jorge Montenegro (Andalusia CajaSur) to form the day's first breakaway after 27km.
That trio's lead would peak at 10 minutes, but had fallen back to three when Cazaux fell off the pace on their first of two climbs up the Alto de Arkale.
Florencio and Montenegro would soon be joined by Iván Gutiérrez (Caisse d'Epargne) Gorka Verdugo (Euskaltel-Euskadi) and Juan Manuel Gárate (Rabobank), but their alliance was short-lived as the decisive 11-man split had also sprung into action behind and took control of the race on their second ascent of the Alto de Jaizkibel.
Sánchez attacked from that group within 400m of the summit and only Vinokourov and Sastre could respond as they pressed back into San Sebastián.
Vinokourov tested his legs with around 3.4km to go, and temporarily dropped Sastre in the process, but the trio were back together as they hit the long run-in and it was Sánchez who proved the cannier rider on the day and bolted late to claim the biggest one-day victory of his career.
Back in the team car, sports director Sean Yates admitted his young Team Sky squad had struggled against the very best in the business but insisted they will have learned a lot from the experience.
He told us: "It was a very hard race and when you look at how strong the top 10 was, with many of the main GC contenders there from the Tour de France, it was going to be almost impossible to compete for top honours in those closing stages - that's why only three of our guys pushed on to the finish. Morris rode well to stay in the peloton, but when guys like Vino, Sánchez and Sastre are hitting out ahead, it was never going to happen.
"John-Lee tried his best as well, but this is a World Cup race and we were always going to be in for a tough time.
"Sometimes it can be frustrating to watch but then you have to take a step back and say 'we're a new team, lessons will be learned, and one day we will be up there'. All the guys are fine though and we're looking good for the weeks ahead."