Sri Lanka lost by one wicket to South Africa last week but turned the tables on England by clinching a nerve-shredding last ball two-run win here on Wednesday.
Dilhara Fernando clean bowled Ravi Bopara with the last delivery of a dramatic Super Eights match which put Sri Lanka, the 1996 champions, into second place in the table and on course for the semi-finals.
England, chasing 236 to win, are in fifth place and currently out of the semi-finals shake-up and with a match against champions Australia next up on Sunday.
"We bowled well and got wickets at crucial times," said Jayawardene whose team had England reeling at 133-6 at one stage.
"It was a brilliant all-round effort. We bowled in the right areas but it wasn't good for the heart.
"The South Africa game was also too close for comfort but it just shows that everyone is fighting for it.
It's an important tournament and finishes like this are good for cricket.
"We had them at 133-6 and thought we were just one ball a