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Two goals in two minutes by Canterbury rocked Otago on its heels as Darren White beat Otago keeper Liam Little in the 24th minute, then Dimitar Bayrev repeated the dose in minute 26.
The second Canterbury goal was conceded when Matt Joy and Tristan Prattley were bisected by a through ball and Bulgarian Bayrev darted through to score.
Little would be disappointed at allowing the earlier goal, but went on to have a fine match and saved a penalty awarded by referee Mirko Benischke in the 71st minute after Julyan Collett was fouled. The spot kick was taken by All White Aaron Clapham in his 50th ASB match, but Otago's keeper guessed correctly and dived full length to save at the base of his goalpost.
Later, Canterbury top scorer Russell Kamo hit Otago's post, but keeper Little had it covered.
Green Island winger Joel Stevens kept Otago in the hunt when keeper Adam Highfield struggled to punch a cross from his goalmouth, and the nippy youngster showed excellent technique to rifle a volley past the keeper's flailing arms just before halftime, making the score 2-1.
"We had a much better second half, pressing high and forcing mistakes. But for the second week running we suffered badly from inconsistent refereeing decisions," Otago coach Richard Murray said.
Otago replaced striker Aaron Burgess with Jude Fitzpatrick in the 85th minute, and it seemed as if the big midfielder had turned up trumps when he hit Canterbury's net, but the goal was disallowed.
Striker Ant Hancock also had a chance for glory when he broke free, but Highfield managed to push Hancock's shot round the post for a corner.
The match finished in high drama, as a defensive mistake had referee Benischke awarding an indirect free kick in the penalty area metres from Otago's goal line, but a wall of yellow shirts cleared the ball.
The win propels Canterbury into fourth place. For Canterbury, it was the fourth home game won against Otago after previous 3-0, 3-1 and 2-0 triumphs.
Otago's home record is better, having notched two recent wins in Dunedin, but Murray's side presently shares bottom slot in the ASB with Waikato, having played three, won none, scored two goals and conceded eight.
In other ASB matches, Wellington earned its first win, beating Waikato 4-1. Waitakere thrashed Manawatu 5-0, and Harley Rodeka's Hawkes Bay stayed in second top place by drawing 1-1 with leader Auckland.
Canterbury United 2
Darren White 24, Dimitar Bayrev 26
Otago United 1
Joel Stevens 45.