Waddell blitzed all contenders, but Lawless was in a tight race with Women's Refuge head Merepeka Raukawa-Tait until hundreds of last-minute votes flooded in for the Xena star.
Yesterday the actress said Ms Raukawa-Tait would have got her vote.
Both women won public acclaim for speaking out against child abuse last year.
The Warrior Princess beat Ms Raukawa-Tait by 782 votes to 601 after an additional 400 e-mails and faxes came in yesterday.
Waddell easily beat his nearest rival, film-maker Peter Jackson, by nearly 200 votes.
Lawless, in a statement made through her publicist yesterday, said she believed fellow anti-abuse campaigner Ms Raukawa-Tait deserved to have won the readers' poll.
"I haven't done enough for a Mallowpuff let alone an award," said Lawless.
"Ms Raukawa-Tait gets my vote."
But her worldwide fans disagreed.
One voter, typical of many, said: "Lucy has been a positive voice for New Zealand and has done much to bring this country to the recognition of the world."
Lawless appeared on New Zealand screens in a variety of roles during 2000.
In October she promoted Breast Cancer Awareness Month, while in August she joined Liz Gunn and Michael Jones as the faces of an anti-child-abuse campaign, the Safe and Sound Appeal, which raised over $150,000.
Her star pulling-power was also put to good use in fundraising for the Starship children's hospital.
Starship Foundation spokesman Andrew Young said Lawless' huge profile was of enormous help to the hospital.
Ms Raukawa-Tait, who last year criticised Maori men for their silence on child abuse and domestic violence, received votes for her "courage, tenacity and determination."
Man of the Year Rob Waddell will be remembered for the glorious moment in September when he single-handedly restored the nation's Olympic pride by winning gold in Sydney.
After returning to Hamilton from the Coromandel yesterday, the world indoor, outdoor and Olympic rowing champion said all his achievements, including winning the Herald's readers' poll, stoodout.
"They're all very different and that's what makes them all unique and special," said Waddell.
"This is something different again.
"It's quite humbling because it's a public vote and people have taken the time and effort to vote for me. I'm delighted."
Since September, Waddell, who has a management degree from Waikato University, has enjoyed spending time out of the water and is looking forward to donning a suit and tie in February when he begins work for financial consultancy firm Deloitte Touche Tohmatsu in Hamilton.
His long-term goal is to compete at the Olympic Games in Athens in 2004, and he will try to win his third straight world rowing title in Switzerland in August.
THE VOTING
WOMEN
Actor Lucy Lawless 782
Merepeka Raukawa-Tait 601
Act MP Muriel Newman 190
Prime Minister Helen Clark 151
Green MP Jeanette Fitzsimons 76
Cricket captain Emily Drumm 76
Winz boss Christine Rankin 58
Hockey player Mandy Smith 18
Green MP Sue Bradford 12
Broadcaster Kim Hill 10
Cyclist Sarah Ulmer 10
Cancer patient Colleen Poutsma 10
Opposition leader Jenny Shipley 8
Labour MP Tariana Turia 5
Squash champion Leilani Joyce 4
Alliance MP Laila Harre 3
Broadcaster Maggie Barry 2
Squash champion Susan Devoy 2
One vote: Marion McDermott, Hilary Barry, Sue Kedgley, Sonia Waddell, Judy Bailey, Heather Collins, Denise Emerson, Denise L'Estrange Corbet, Georgina Beyer, Lianne Dalziel.
MEN
Olympic rower Rob Waddell 241
Film-maker Peter Jackson 67
Health chief David Clarke 52
Green MP Nandor Tanczos 49
Boxer David Tua 31
Mad Butcher Peter Leitch 26
Men's Rights, Bruce Cheriton 25
Chemist Alan MacDiarmid 24
Yachtsman Russell Coutts 20
Businessman Stephen Tindall 17
Christian leader Graham Capill 13
Commissioner Roger McClay 12
All Black coach Wayne Smith 12
Broadcaster John Campbell 11
Yachtsman Peter Blake 11
Alliance MP Grant Gillon 11
Actor Russell Crowe 9
Deputy PM Jim Anderton 8
Jockey Michael Walker 7
Yachtsman Dean Barker 7
Cereal-maker Dick Hubbard 7
Broadcaster Lindsay Perigo 6
Television presenter Nick Eynon 5
Writer Joe Bennett 4
Race conciliator Rajen Prasad 4
Act MP Rodney Hide 4
Weatherman Augie Auer 3
Labour MP John Tamihere 3
Speaker Jonathan Hunt 3
All Black Doug Howlett 3
Minister Michael Cullen 2
Horseman Mark Todd 2
One vote: Mikey Havoc, Andrew Mehrtens, Sir Michael Hardie Boys, Leonard Manning, Warren Templeton, Todd Blackadder, Matt Robson, Jim Moriarty, Ritchie Barnett, Paul Holmes, Mike Moore, Max Newman, Kevin Smith, Michael Campbell, Selwyn Cushing, Dover Samuels, Robbie Whitlock, Mike Hosking, Rob Robinson, Willie Jackson, Phil Goff, Richard Poole, Selwyn Dawson, John Hawkesby, Pat Dunn, Peter Williams, QC, Steve Braunias, Gordon Tietjens, Tana Umaga, Aaron Slight, Ramesh Patel, Kevin Roberts, Don McKinnon, Peter Dunne, Stephen Fleming, Garth George, David Tua's hairdresser.
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