India, at tea on the fourth day, had slumped to 121 for five in their second innings - but that still left them 440 runs ahead.
England now needed to set a new Test world record fourth innings winning total, surpassing the 418 for seven made by West Indies against Australia in Antigua in May 2003, if they were to level this series at 1-1.
VVS Laxman and Mahendra Singh Dhoni, who'd smashed a rapid 92 in India's record first innings 664, were both 16 not out.
Medium-pacer Collingwood's figures of two for 24 were his best in Tests.
India, when rain forced an early lunch, had collapsed to 35 for three with fast bowler James Anderson capturing the prize wicket of Sachin Tendulkar, bowled for one in what could be his last Test innings in England.
India resumed with captain Rahul Dravid two not out and Sourav Ganguly 21 not out.
Left-hander Ganguly continued to counter-attack, cutting 6ft 7in fast bowler Chris Tremlett through the slips for a couple of fours while a becalmed Dravid spent 35 balls on two.
The Indian fourth-wicket pair posted a fifty partnership of which Dravid's share was just five before Ganguly completed a dashing personal fifty in 53 balls with nine fours.
But Ganguly fell for 57 when, trying to force Collingwood - who before this match had a Test bowling average of 130 - he was caught by Andrew Strauss at slip.
Dravid took 91 balls to both score his first boundary, a late cut four off left-arm spinner Monty Panesar, and go to double figures.
However, the batsman nicknamed 'The Wall' finally ran out of patience when he too fell to the Collingwood-Strauss combination for 12, made in 140 minutes, and India were 89 for five.
Alastair Cook dropped a sharp chance at silly point off Panesar when Dhoni was on 11.
England were a bowler light with left-arm quick Ryan Sidebottom off the field with a side injury he'd sustained earlier in the match.
Dravid, despite England being bowled out for 345, 120 runs short of the follow-on total of 465, chose to bat again.
He then saw England reduce India to 11 for three inside seven overs with Anderson taking two wickets for no runs in four maiden overs.
Tendulkar, after both openers fell cheaply, walked out to applause.
But he was soon returning to a further ovation, after being bowled by Anderson when an inside-edged drive saw his middle and leg stumps knocked out of the ground.
Earlier, Anil Kumble, whose 110 not out had been the centrepiece of India's record innings total against England, ended a last-wicket partnership worth 40.
The 36-year-old moved into sole possession of third place in the list of Test cricket's most successful bowlers, ahead of retired Australia quick Glenn McGrath, with his 564th wicket when he had Panesar lbw for nine. Tremlett was a Test-best 25 not out.
India, 1-0 up, have won just two Test series in England, 1-0 in 1971 and 2-0 in 1986, in 15 tours dating back to 1932.