Australia led England by 626 runs with nine second-innings wickets in hand at stumps on the third day of the first Ashes test on Saturday.
Captain Ricky Ponting was unbeaten on 51 with opener Justin Langer not out 88 with Australia in complete control at 181 for one with two days left to play as the hosts continued their bid to regain the Ashes won by England in 2005.
Australia turned down the opportunity to enforce the follow-on after bowling out England for 157 to lead by 445 on the first innings.
England had started the day on 53-3 in reply to Australia's 602-9 but lost their last seven wickets for 79 to be all out before tea.
Australian fast bowler Glenn McGrath, playing his first test in almost 11 months, took 6-50 while Stuart Clark captured three wickets and Brett Lee one.
Ian Bell top scored for England with 50 but the only other player to make at least 20 was left-arm spinner Ashley Giles, who made 24 before he was last man out.
