Susan Boyle sensationally beaten in talent show final

Essex dance troupe Diversity beat worldwide YouTube phenomenon. Sadie Gray reports

Cinderella will not be going to the ball. Susan Boyle, whose singing has transformed her in the past month from a slightly dotty-looking spinster into a worldwide inspiration, last night sensationally lost the final of the show that made her – Britain's Got Talent.

Despite an assured reprise of "I Dreamed a Dream", the song that made her a YouTube phenomenon, she was defeated by the dance troupe Diversity, and so will not get to sing for the Queen, after all. The 10-strong troupe from Essex stood open-mouthed with disbelief as they realised they would leave with a £100,000 cheque and a booking at the Royal Variety Performance. Beside them on the stage, Boyle quivered with nerves. "The best people won", she said, before wishing them "all the best".

The 48-year-old church volunteer from Blackburn, West Lothian, had been regarded as a cert by many, including the bookies. "As far as we are concerned, she just needs to turn up to win this," Rupert Adams, of William Hill, had said hours before the show.

The disappointment capped a tumultuous six weeks for Boyle – dubbed the Hairy Angel – who burst into the national consciousness with the broadcast of her audition, in which the initial scepticism of judges Piers Morgan, Amanda Holden and Simon Cowell as she took to the stage was blown away by the power of her soaring voice as she sang "I Dreamed a Dream", from the musical Les Misérables.

That audition was an internet sensation, scoring hundreds of millions of hits on video sites and becoming YouTube's fifth most watched clip ever. Boyle gained the support of A-list celebrities, including Demi Moore and Elaine Paige, and her semi-final performance on Monday drew 15.4 million viewers.

Boyle, who lives alone in her family's council house with her 10-year-old cat after the death two years ago of the elderly mother she had cared for for years, has found sudden fame hard to deal with, and as tension mounted last week she was said to be struggling to cope.

Reports claimed she was repeatedly bursting into tears, and by Wednesday had packed her bags and was on the verge of pulling out of the show. She was also said to have lost her temper with a couple of journalists at her London hotel, causing police to intervene.

Diversity, had never been tipped to win despite wowing the judges with their high-energy routines, which their choreographer, Ashley Banjo, 20, said were inspired by sources including the children's film Transformers. Unable to believe they had won the viewers' vote, he said: "Honestly, I'm going to wake up in a minute."

The group, comprising three sets of brothers and a handful of friends, ranging in age from 12 to 25, formed in 2007. Those not still at school include an IT worker, a telecommunications worker and a bathroom fitter. Working from the dance studio run by Banjo's mother, they won the National Street Dance championship the same year.

In third place in Britain's Got Talent was the Birmingham saxophonist Julian Smith, 39. Also in the final was 10-year-old singer Hollie Steel, of Accrington, Lancashire, who got through after the judges gave her a second chance when she burst into tears during her first attempt at the song "Edelweiss", and Stavros Flatley, a father-and-son comic "Riverdance" tribute. Demetrios Demetriou, 41, and his 13-year-old son Michalakis Andreas, who described their act as "two fat versions of Michael Flatley with a Greek element".