After some well-worked tries and a mistake-riddled Makos effort, Otago led 24-14 with 23 minutes left.
However, the home side flicked a switch and scored 18 unanswered points as Otago faded down the stretch.
To make matters worse, a late Marty Banks penalty meant Otago did not even pick up a bonus point for getting within seven, leaving it two points behind fourth placed Southland in the ITM Cup championship with two games to play.
While Otago could sneak in to the playoffs with just one win from its final two games against Bay of Plenty and Manawatu, coach Tony Brown said it was must-win territory.
''Obviously we need to win our last two games and see what happens. We need to go back to the drawing board and play some good footy to finish.''
While Otago dominated possession and territory in a dour first 20 minutes, its scrum repeatedly came unstuck against one of the best packs in the competition.
Hayden Parker finally opened the scoring after 18 minutes with a penalty after Quentin MacDonald got pinged for not rolling away at the breakdown.
Otago lost prop Donald Brighouse after he copped a knock to the head and failed a concussion test at the half-hour mark, making way for Michael Mata'afa.
Tasman's handling was poor in the first half. The side knocked the ball on six times within the first half-hour and looked anything but a premiership contender.
However, Makos centre Kieron Fonotia finally gave the home crowd something to cheer about when he went over from close range courtesy of a subtle Jimmy Cowan pass in the 31st minute.
Otago hit back with a try of its own almost immediately, when Jayden Spence got outside David Havili and crashed over out wide.
But Cowan was at it again a few moments later, dishing a short ball to Havili, who somehow ran between three defenders to go in untouched from 40m and put Tasman 14-10 up at the half.
Naulia Dawai had a solid game in the No 6 jersey and played a big part in Otago's second try, scooping up a loose ball at halfway and feeding Hugh Blake inside for him to scamper over from 30m.
The upset was on when Sam Anderson-Heather crashed over via a textbook lineout drive to put Otago up 24-14 after 57 minutes, the try coming just moments after Marshall Suckling botched a try out wide when he opted to pass to Josh Renton inside, who knocked on.
But that was as good as it got.
Tasman ran rampant around the fringes and suddenly began busting Otago open with ease, scoring 10 quick points to tie the game at 24-24 with 13 minutes to play.
Down 29-24 with five minutes left, Parker missed the chance to close the gap when he missed a sitter in front.
Instead, Tasman's Banks had the last say with a penalty, which could be the difference between Otago making the playoffs or having an early holiday.
''We had an opportunity to win it at the end but we couldn't execute,'' Brown said.
''The good news was we created opportunities, the bad news was we didn't take them ... we missed too many tackles as well.
''Their attack was pretty good around the ruck and [Jimmy] Cowan was causing havoc around it,'' he said.
Otago is away to Bay of Plenty on Saturday, before it hosts table-topping Manawatu the following Friday night.
Otago under-19 was beaten 37-17 by Waikato under-19 in their top eight match in the inaugural Jack Hobbs memorial tournament in Taupo yesterday.
Otago will play Bay of Plenty, which lost 32-6 to Canterbury yesterday, in a bottom four playoff on Wednesday.
- Robert van Royen
Otago v Tasman
The scores
Tasman 32
Kieron Fonotia, David Havili, Jimmy Cowan, Ross Geldenhuys tries; Marty Banks 3 con, 2 pen
Otago 24
Jayden Spence, Hugh Blake, Sam Anderson-Heather tries; Hayden Parker 3 con, pen
Halftime: Tasman 14-10.
