It was an unfortunate defeat, with the Three Lions being caught out at the back after failing to take their own chances at the other end.
A defensive mix-up between Liam Moore and Saido Berahino ultimately cost England the result in a match they had the upper hand once they managed to find their rhythm.
England U20 0-1 Portugal
Toulon Tournament
Third/Fourth-place playoff
Parc des Sports, Avignon
Sunday 1 June 2014
But Gareth Southgate’s side paid the price for their profligacy in front of goal and had to watch as Portugal were presented with third spot at this year’s competition.
It took England 20 minutes to really get into the game and Portugal came closest to finding an opener, when Bruno Fernandes picked up the ball in midfield and struck a dipping shot from distance which beat Jack Butland only to crash back off the bar.
That served to kick-start the Lions into life and Berahino came close in similar circumstances at the other end as he collected a loose pass from Ruben Semedo and made himself some space to try his luck with a left-footer, which flew narrowly wide.
And Berahino was denied by a great save from Bruno Varela seconds later, as a quick interchange between Tyias Browning and Nat Chalobah sent him clear into the box, but his shot was turned around the post by the Portugal keeper.
England started the second half brightly too, with Chalobah heading a James Ward-Prowse free-kick wide of the target, before the lively Nathan Redmond cut in from the left and shot over the angle.
Norwich City flyer Redmond came even closer when he continued a sweeping move out on the left, beat his man on the inside and struck a shot at goal which was deflected wide.
That led to England’s best spell of the game as they pushed Portugal further back, and with Chalobah and Ward-Prowse orchestrating things from midfield, they should have taken the lead.
Another Ward-Prowse centre caused difficulty for Portugal, but Ben Gibson’s flick-header drifted just wide of the post with Varela stranded.
And it was the same provider moments later, but this time Varela saved well from Cauley Woodrow’s far-post header.
So it came as a surprise when Portugal made a rare breakaway to the other end to grasp the lead just shy of the hour mark, when Berahino's clearance hit Moore’s backside and spun straight into the path of Ricardo Horta.
The Vitoria forward gleefully accepted the opportunity and smashed the ball past Butland and into the top corner.
It was a blow to the Three Lions, as they looked to force the game back on to Portugal. But with a goal to show for it, they were never going to let that slip as they hung on for victory and the honour of third place.
Portugal (4-2-3-1): 1 Bruno Varela (Benfica); 2 Joao Cancelo (Benfica), 4 Tobias Figueiredo (CF Reus Departiu) (c), 6 Fabio Cardoso (Benfica), 5 Rafael Floro (Sheffield Wednesday); 13 Ruben Semedo (Sporting Lisbon), 15 Bruno Fernandes (Udinese); 7 Ricardo Horta (Vitoria), 11 Helder Costa (Benfica), 19 Claude Goncalves (Ajaccio); 18 Alexandre Guedes (CF Reus Departiu),
Substitutes: 10 Iuri Medeiros (Sporting Lisbon) for Guedes 25, 14 Fabio Carvalho (Feirense) for Fernandes 75, 3 Ruben Vezo (Valencia) for Goncalves 80.
Substitutes not used: 8 Leandro Silva (Porto), 9 Carlos Fortes (Racing Santander), 12 Rui Silva (CD Nacional), 16 Kiki (Athletico SAD), 17 Fabio Sturgeon (Belenenses), 20 Joao Teixeira (Benfica).
Manager: Illidio Vale
Goal: Ricardo Horta 56
Caution: 2 Joao Cancelo 52
England (4-2-3-1): 1 Jack Butland (Stoke City); 2 Tyias Browning (Everton), 16 Ben Gibson (Middlesbrough), 5 Liam Moore (Leicester City), 3 Luke Garbutt (Everton); 4 Nathaniel Chalobah (Chelsea), 8 James Ward-Prowse (Southampton); 11 Nathan Redmond (Norwich City), 14 Jake Foster-Caskey (Brighton & Hove Albion), 9 Saido Berahino (West Bromwich Albion); 19 Cauley Woodrow (Fulham).
Substitutes: 20 Will Keane (Manchester United) for Forster-Caskey 65,
Substitutes not used: 6 Michael Keane (Manchester United), 7 Jordan Obita (Reading), 10 Josh McEachran (Chelsea), 12 Brad Smith (Liverpool), 13 Jonathan Bond (Watford), 15 Eric Dier (Sporting Lisbon), 17 Jordan Cousins (Charlton Athletic), 18 Solly March.
Head coach: Gareth Southgate.
Cautions: James Ward-Prowse 39, Luke Garbutt 60
Referee: M Do Nascimento (Brazil).
Assistant referees: Rios Barretos & Back (Brazil).
Fourth official: Ponton Rodriguez (Colombia).