Indonesia stormed back from 0-2 down to beat England 3-2 and reach the Sudirman Cup final for the seventh time in 10 editions since the inaugural event in 1989.
They now meet defending champions China in a repeat of the 2005 final, won easily by the Chinese in Beijing.
China, who earlier in the day beat South Korea 3-0, will start heavy favourites but may drop world champion Lin Dan, who has disappointed coach Li Yongbo in his last two matches.
The Indonesians' semi-final against England hinged on the men's doubles where Candra Wijaya and Kido Markis recovered from a slow start to beat world championship silver medallists Anthony Clark and Robert Blair 21-17, 21-14.
The result was a bitter disappointment for the English, playing in the semi-finals for the first time.
They had got off to a flying start when world mixed doubles champions Nathan Robertson and Gail Emms battled past world number two pairing of Widianto Nova and Lilyana Natsir 22-20, 20-22, 21-19.
Tracey Hallam put the English 2-0 up, coming from 18-12 down in the decider to beat Maria Kristin 18-21. 21-19. 21-18.
But then Andrew Smith was edged out by Olympic champion Taufik Hidayat 22-20, 21-15 and in the women's doubles Emms and Donna Kellogg lost 21-18 21-16 to Greysia Polii and Vita Marissa, squaring the tie at 2-2.
In the deciding men's doubles the Indonesian pair trailed 6-1 in the first game but took control from 12-11 to go on to win in straight games and dash England hopes.
England team manager Ian Wright took defeat on the chin, telling reporters: ''There's no disapointment at all.
''Everybody gave it their best effort and nobody expected us to be here and be 2-0 up against Indonesia.''
Earlier, Chinese world number one Lin struggled to win his match against world-ranked 83 Shon Seung-mo 21-11, 18-21, 21-14.
Coach Li, seen to remonstrate courtside, later told a news conference: ''If he continues like this we might change him in the final.'' Lin's stuttering performance followed a defeat in the group stage on Thursday when he went down 21-17, 21-17 to Malaysian former world number one Lee Chong Wei.
Li today said Lin was ''not showing the best side of himself'' and China needed to be sure of retaining their title here as they prepare for the 2008 Olympics in Beijing.
China were set on their way against the Koreans by top mixed doubles pair Zheng Bo and Gao Ling who beat Han Sang-hoon and Lee Hyo-jung 21-17, 22-20.
Olympic women's singles champion Zhang Ning made it 2-0 with a 21-14, 21-17 victory over world-ranked 15 Hwang Hye-youn and Lin then booked his country's place in tomorrow's final, though clearly not to coach Li's satisfaction.