Needing at least a draw to keep their Ashes defence alive, the tourists produced some of their best bowling of the series to have the Australians squarely on the back foot after they had won the toss and chosen to bat.
In-form middle order batsman Mike Hussey was holding the Australian innings together on 46 not out, with Shane Warne on eight.
Left-arm spinner Monty Panesar, overlooked for the first two Tests, had an immediate impact, claiming Justin Langer's wicket with his seventh ball and then removing Andrew Symonds and Adam Gilchrist just before tea for figures of 3-69.
Embattled paceman Steve Harmison also bounced back strongly and had 2-32, including a sharp catch of his own bowling to remove the dangerous Michael Clarke for 37.
Panesar was brought on just before lunch and struck with the first ball of his second over, clean bowling a defensive Langer.
He suffered some damage at the hands of the recalled Andrew Symonds, who hit two sixes in three balls and took 17 runs off Panesar's 13th over, but the spinner had his revenge in the following over when Symonds cut at a shortish delivery and got a thin edge to wicketkeeper Geraint Jones, who snared the catch at the second attempt.
Panesar's next over saw him claim the prized wicket of Gilchrist, who walked when he was caught by a diving Ian Bell at short-leg after the ball had just brushed his gloves off the pad.
Australia were in deep trouble at 172 for six as Gilchrist trudged off.
Such a scenario seemed unlikely when Australia cruised to 47 for no wicket in the first hour, with Matthew Hayden and Langer scoring freely.
However, the English hit back after the break and claimed 3-22 in the next hour.
Matthew Hoggard (1-40) was the first to strike, pitching the ball up to Hayden (24) and getting it to do just enough to find the outside edge and provide a simple catch to Jones to continue Hayden's poor series.
Ponting, who has been enjoying a sensational year with the bat, was then trapped lbw by Harmison for just two.
There was a slight question mark about the height of the delivery but Harmison was elated to snare an early victim after his woes in the first two Tests.
Harmison's second wicket was memorable - the big pace bowler somehow hauling in a Clarke pull shot on his follow through.