Player-of-the-tournament Luke Fielden was in exceptional form scoring one try and creating two more for the Falcons who fought back after trailing 21-14 midway through the second half.
It was Falcons who got out of the blocks quickest, with Fielden making a half-break before Alex Tait was held up over the line.
But the Sarries’ defence didn’t hold out for long as back-row Redford Pennycook burst over the line put Newcastle in front, Joel Hodgson adding the extras.
Jackson Wray was then isolated and despite the suspicion of a knock-on, Tait pounced on the ball and raced in from the 22, Hodgson again converting for a 14-0 lead.
But the mercurial Hodgson's defence then let him down as Sarries hit back immediately through James Short, skipping past his feeble attempted tackle, Marcus Watson adding the extras.
And Ben Ransom took advantage of another missed tackle from Hodgson to stroll over, Watson converting again to tie things up on the stroke of half-time.
Saracens’ pace was clearly becoming too much for a powerful Newcastle side and Watson broke through the Falcons defensive line to give the reigning champions the lead for the first time.
But with Newcastle looking dead on their feet, Fielden was fastest on to Tait’s grubber through to get the Falcons back to within two, his missed conversion against the post keeping Sarries in front.
And the comeback continued with Tait finishing off a sensational length-of-the-field effort collecting the final inside pass from Aaron Myers to put Newcastle back in front.
Saracens’ reign was ended as Chris Pilgrim finished off more fantastic work by Fielden, whose conversion put Falcons ten points clear.
Newcastle booked their place in the finals by dispatching Wasps and Harlequins, Fielden grabbing a hat-trick in their opening 38-7 win over the Adams Park outfit.
That was Wasps’ second game of the evening as Quins kicked things off with a 19-0 win in the opener, Ross Chisholm scoring the pick of the tries for the hosts.
Those results set up a tantalising decider between the hosts and Newcastle, and after Quins looked to be on their way through taking a 12-0 lead, Fielden and co roared back, the winger scoring the winning try with the last play of the game for a 17-12 victory.
It was altogether more straightforward for Sarries who strolled to a 38-7 win over Bath, Jean-Baptiste Bruzulier scoring twice in their opener.
And after a tough opening half, two tries from Short proved the difference for Sarries as they saw off Sale 21-5 to book their place in back-to-back finals.
In a dead rubber to finish the group games Bath got the better of Sale 28-12, Tom Heathcote helping himself to two tries.
To see all the action from this year’s J.P. Morgan Asset Management Premiership Rugby 7s Series 2011 visit www.jpmorgan7s.com
The Falcons Celebrate