Despite leading twice, the Three Lions were undone in the shoot-out as La Roja held their nerve to pick up another under-age accolade
Spain have won the UEFA Under-17 Championship for the third time after beating England on penalties in Varazdin.
The teams could not be separated in normal time, with Spain twice coming from behind to level matters before eventually triumphing 4-1 in the shoot-out.
England took the lead thanks to an individual effort from Chelsea youngster Callum Hudson-Odoi, but Spain levelled just before half-time through Barcelona's Mateu Morey.
The Three Lions reclaimed the lead when Manchester City's Phil Foden found the net with a powerful long-range effort.
However, they were cruelly denied victory when Villarreal youth Nacho Diaz scored for Spain in the sixth minute of injury time to force the game to penalties.
Liverpool's Rhian Brewster and Man City's Joel Latibeaudiere missed their spot-kicks as Spain finished each of theirs to ensure a third U-17 title.