By Martin Gough
Australia won the second Ashes Test by six wickets and went 2-0 up in the series after bowling England out for 129 on day five in Adelaide.
England lost nine wickets for 60 in 43 overs, with Shane Warne taking 4-49 and key batsmen playing some poor shots.
Chasing 168 to win, Ricky Ponting (49) and Michael Hussey (61no) shared a third-wicket stand of 83 in 16 overs.
Ponting and Damien Martyn fell in quick succession but Michael Clarke joined Hussey to win with three overs left.
No team in history has lost after declaring on a higher total than England's 551-6 batting first in a Test.
England now face the daunting task of winning two of the remaining three Tests over the next four weeks to tie the series and retain the Ashes urn, won amid triumphant scenes in September 2005.
In baking heat, a sleepy crowd were expecting a draw as the final day began but Warne, who took 40 wickets in that last Ashes series, refused to let the match die.
Just 17 wickets fell in the first four days but four went down in the morning session to turn the game on its head.
606: DEBATE
Warne took two wickets and played his part in the run out of Ian Bell for 26, while Brett Lee found reverse swing with a ball just 30 overs old to make Andrew Flintoff and Geraint Jones look indecisive.
Andrew Strauss was unlucky to be given out for 34 as short-leg fielder Hussey took a catch off pad rather than bat and umpire Steve Bucknor upheld Warne's half-hearted appeal.
But England were to blame for the wickets that followed as they looked to re-establish the initiative with attacking play.
Bell hesitated when called for a quick single as point fielder Clarke threw to Warne at the non-striker's end.
Kevin Pietersen chose the wrong time to begin sweeping Warne and was bowled round his legs by the fifth ball he faced, a delivery pitching out of the rough.
Then, with a captain's innings desperately needed, Flintoff's footwork was lacking as he wafted outside off stump at Lee and departed for two.
It is unlikely England coach Duncan Fletcher ate his lunch with a smile, even though two lower-order men included in the side for their batting would accompany Paul Collingwood into the afternoon.
If he did, his reverie lasted just 10 balls after the break as Jones groped at a Brett Lee delivery a yard wide of off-stump and chipped to the gully fielder.
Three overs later, Ashley Giles got an edge to a fizzing Warne leg break that was taken at first slip for a duck.
Two marginal lbw decisions by umpire Rudi Koertzen accounted for Steve Harmison and - after a 41-minute resistance - James Anderson, and gave Glenn McGrath his first wickets of the match.
Australia lost openers Justin Langer and Matthew Hayden at the start of their chase but they were down more to over-aggressiveness than England ingenuity.
The home side changed gear as if batting in the middle of a one-day international and England let them, opting to try and restrict runs rather than putting fielders in catching positions.
Flintoff hobbled through the pain of his sore left ankle to bowl nine overs then cut a sorry figure in the field as Hussey hit the winning runs.