Team sprinters Eddie Dawkins, Sam Webster and Ethan Mitchell have been edged out of their Olympic dream by 0.102s against Britain at the Rio velodrome.

The world champions can take pride in becoming the first New Zealanders to earn silver in a track cycling sprint event, backing up the bronze Simon van Velthooven secured in the keirin at London.

Yet gold medals remain elusive for New Zealand in track cycling. Individual pursuiter Sarah Ulmer remains the only Kiwi to collect one, in the endurance rather than sprint arm of the discipline.

The team sprint contest seemed to be raced in the right spirit. There appeared to be genuine camaraderie between the medallists on the dais after a robust contest.

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The investment of time and energy in a fast-twitching, slow-burning project over many years has paid dividends, but not to the extent Cycling New Zealand had aimed.

Webster said there was no less commitment in what they delivered.

"We 'won' these silver medals.

"GB had some stellar rides and set two Olympic records [in the qualifying and the final] but I'm proud of what we achieved."

"They're the three fastest times we've ridden, we had an ideal build-up and I couldn't be prouder of the guys standing next to me," echoed Mitchell. "We left everything out there and, if anything, it's probably made us hungrier."

"We pushed hard and got pipped," Dawkins added. "We're not disappointed. It's unfortunate we got beaten, but it was by a better team."

Mitchell got a ballistic start to lead them through the first lap by 0.035s. However, Webster appeared to struggle for Mitchell's wheel more than his opponent Jason Kenny was grasping for his lead-out rider Philip Hindes.

Dawkins powered into the last lap 0.086s down, but Callum Skinner, the replacement for Sir Chris Hoy from the victorious London trio, held on.

Cycling New Zealand was allocated almost $26.5 million of taxpayer money across the Olympic cycle to advance their cause from the two bronze medals and one silver achieved in London.

It included optimum technology for the sprint programme, like using state of the art wind tunnels, to ensure the best return on investment.

A silver in one of the most coveted events on the Games schedule is the filtered product so far.

The Kiwi sprint bike had its aerodynamic drag cut by more than 15 per cent in the build-up, a fluid one-piece handlebar was integrated into the frame and the weight was reduced.

However, British tenacity and power was enough to retain them their title.

The New Zealanders posted the second-fastest qualifying time but were overshadowed by Britain's new Olympic record of 42.562s.

Dawkins, Webster and Mitchell clocked 42.673 seconds against the Netherlands.

The Kiwi trio responded by reducing the Games record further to 42.535s in the first-round ride-off with Germany.

Elsewhere, New Zealand was fourth fastest in the men's team pursuit and still have a chance to contest for gold if they win their next race against top qualifier Britain.

Dylan Kennett, Piet Bulling, Aaron Gate and Regan Gough are looking to improve on the country's bronze medals from the past two Games.

Their women's counterparts were fifth-fastest, pushing them out of contention for gold or silver.

Rushlee Buchanan, Lauren Ellis, Jaime Nielsen and Racquel Sheath will race against eighth-ranked Poland in the next round.

A fast time could still push them into a ride-off for bronze.

The top four women's TP qualifiers (in order) were Britain, the United States, Australia and Canada.