Justin Rose will head into the final round of the Australian Open two strokes off the lead after a late stumble cost him a share of the overnight lead at The Lakes in Sydney.

Rose had held a two-shot advantage in the afternoon but spoiled his round with consecutive bogeys on the final two holes to finish the day on five under overall.

Despite that the world number four remains firmly in contention to end 2012 on a high with his third-round two-under-par 70 leaving him in second place behind local hopeful John Senden.

It is the second consecutive year Senden has held the 54-hole lead at the tournament and Rose is expecting a tough battle when they are paired in the final round with high winds expected.

Senden, who had led after the opening round, had to withstand a shaky as he bogeyed his opening two holes to fall behind a cluster of seven players who briefly held the lead.

But he made his charge on the back nine, with an eagle on the par-five 11th and adding consecutive birdies from the 13th to card a two-under 70 and sit at seven under overall.

Matt Jones (69), Peter Senior (69) and Kieran Pratt (70) are level in third place a shot behind Rose.

Pratt stole the outright lead with spectacular eagle at the 11th but his stint at the top of the leaderboard ended on the very next hole with a bogey.

Champion in 2001, Stuart Appleby and his American playing partner Kyle Stanley both posted two-under 70s to be three under for the tournament alongside Cameron Percy (72).

Pre-tournament favourite Adam Scott is a shot further back among a group of nine players in a share of ninth after posting his second straight 71.

Scott burst out of the blocks with consecutive birdies but had given both shots back by the fifth hole to make the turn in level par.

He mixed two bogeys and three birdies on the way home and will need something special on Sunday to claim his second Australian Open title, trailing by five shots.

"It was a day of just trying to do my best to stay up there and it's nice to be leading the golf tournament" - John Senden

Scott Gardiner fired the low round of the day, a four-under 68, to sit a further shot back alongside amateur Cameron Smith (69) and defending champion Greg Chalmers (69).

Geoff Ogilvy is also at one under after carding an adventurous 70 that included an eagle and a double bogey.

Meanwhile, veteran Tom Watson made a move in the wrong direction with a six-over 78.