Martin Johnson claimed England are suffering from a "perception problem" after Wales kept their RBS 6 Nations title defence on course with a record-equalling eighth consecutive championship victory, 23-15.
England lost the penalty count 12-8 and had both Mike Tindall and Andy Goode sin-binned in Cardiff, taking their yellow card count to eight in just three matches.
Wales took full advantage to win 23-15 with Stephen Jones kicking five penalties and Leigh Halfpenny adding a long-range strike to his fourth Test try.
England hit back from a 9-0 deficit and a shocking start to push Wales hard with a spirited performance and tries from Paul Sackey and Delon Armitage.
But ultimately those indiscretions proved costly and Johnson is concerned England’s reputation is starting to precede them.
“There is a perception issue now,” he said. “It is self-perpetuating. We have to sort it out. We have to be whiter than white when we play.
“I spoke to the referee (Jonathan Kaplan) on Friday and he said he had no issue with us as a team.
“It’s a perception problem because we were down 5-0 in the penalty count very early. Playing with 14 players is very difficult.”
Despite being 9-0 down after 20 minutes England refused to give in and went on to produce their most encouraging performance in the six Tests since Johnson took charge.
But while there was plenty to be pleased about, Johnson was frustrated that England had not managed to snatch the victory.
“I am down because we lost. It was a Test we could have won. Despite the penalty count, despite the yellow cards we could have turned them over if we had executed a bit better and kept our composure,” said Johnson.
“It was a Test match for either side to win really and it came down to self-belief.
“We scored two tries but we gave away 18 points in penalties. Ultimately we could have overcome it. We missed a couple of penalties and one at the end (by Toby Flood) which could have put a lot of pressure on them.
“But there were a lot of good things. We created openings and defensively Mike Ford’s system was fantastic.
“Will we be better for the experience? Yes hopefully. Winning is a habit and it is something we need to get into and learn how to do.
“They put in enough effort to win a Test match but you need composure in the heat of the moment to finish it off. We didn’t quite have that.”
England’s efforts were hampered as both Tindall and Goode were sin-binned for not releasing the ball quickly, and Joe Worsley - who earned man of the match honours - admitted that inexperience had been a factor.
“Wales are a fantastic team, but I’m gutted we didn’t win,” he said.
“We need to react better when we get sin-binned.
“We have a relatively new team, a new coaching set-up, and we’ve not had that situation before. Next time that happens it won’t be such a big issue.”