After bowling England out for a meagre 155, the Australians were in trouble at 93 for five and 108 for six before Michael Hussey came to the rescue for Australia once again and guided the home side to victory with 11.2 overs to spare on Friday.
England seamer Jon Lewis took career-best figures of 4-36 and James Anderson chipped in with 2-29 to have Australia firmly on the back foot early on.
Anderson also had a confident appeal against Hussey turned down when he was on 19, with replays indicating Hussey got a fine edge through to wicketkeeper Paul Nixon only for umpire Daryl Harper to give it not out.
Anderson charged down the wicket and confronted Hussey after the decision but the West Australian was unmoved.
Lewis started England's response when he had openers Adam Gilchrist and Matthew Hayden caught in almost identical fashion, mistiming pull shots and holing out to Anderson at deep square leg.
Anderson had Brad Hodge caught at gully for a duck before Lewis then had Andrew Symonds caught behind to reduce Australia to 48 for four.
But first Michael Clarke and then Hussey steadied the Australian innings to get the home side over the line.
Although they lost the match, the English will have gained confidence from their performance after enduring a wretched tour of Australia.
After arriving in Australia in November, they only won their first game last Tuesday when they beat New Zealand in Hobart.
But any momentum from that game was quickly dashed as they squandered a bright start by openers Andrew Strauss and Mal Loye.
The opening pair took England to 52 at five runs an over before Australia, led by a resurgent Glenn McGrath took 10 wickets for 103 runs to bowl England out for 155 after just 42 overs.
The tourists had started promisingly, with 34-year-old debutant Loye, called up from provincial cricket in New Zealand to replace injured skipper Michael Vaughan, looking at home immediately.
Loye played some audacious strokes, including a sweep for six off pace bowler Brett Lee and consecutive boundaries from the first two balls he faced from McGrath.
But soon after he was in two minds over whether to play or leave and was caught at first slip by Hayden off the bowling of Nathan Bracken.
England then succumbed at regular intervals, with Strauss falling to a brilliant diving catch from Hodge, Joyce edging McGrath, and Collingwood falling first ball to McGrath in the next over.
Collingwood had earlier been involved in the farcical run out of Bell.
Bell chopped a ball to the gully which Cameron White parried behind him. Collingwood called Bell through but both players hesitated mid-pitch.
Bell stuttered back and forth, then both players began running towards the bowler's end before Bell stopped and turned to see White's under-arm throw trickling into the stumps.
England 155 all out in 42 overs (M Loye 36, Dalrymple 31, Flintoff 27; McGrath 3 for 24, Bracken 3 for 24, Lee 2 for 53) lost to Australia 156 for 6 in 38.4 overs (Michael Hussey 46 n o, Clarke 36, Brett Lee 20 n o; Jon Lewis 4 for 36, Anderson 2 for 29) by 4 wickets