The National Museum of Computing at Bletchley Park staged the event to show off the newly rebuilt Colossus and to raise money for the museum.
A team in German encrypted three messages using an authentic German Lorenz S42 encrypter used by the German army and broadcast the messages by radio.
The aim of the challenge was to have the rebuilt Colossus race with a virtual Colossus running the same programs on a laptop. But both teams were beaten by amateur cryptographer Joachim Schuth, who used software he had designed specially.
The team using the virtual Colossus came second with the actual machine trailing in well behind. It was held up by problems with the radio transmission and two valves blowing just before the final run on the code was made.
The rebuilding of Colossus took 14 years, in part because the original machines and their plans were destroyed after the war to keep the project secret.
The only details the team had to work with were ten photographs, a few pages of circuit diagrams that had been kept illegally and a paper from the machine's creator Dr Tommy Flowers.
"It was extremely important in the build up to D-Day," Tony Sale, who led the team, told the BBC.
"It revealed troop movements, the state of supplies, state of ammunition, numbers of dead soldiers - vitally important information for the whole of the second part of the war."
The Colossus machine will stay in the museum for public display. The museum hopes it will help raise the £6 million needed to ensure the centre isn't shut down.
German cryptographer beats Colossus
By Iain Thomson on Nov 19, 2007 7:25AM