By Oliver Brett
England conceded a record 221-5 before losing the Twenty20 international to Australia by a margin of 77 runs.
Adam Gilchrist (48) and Ricky Ponting (47) put on 69 from 29 balls before Andrew Symonds and Cameron White accelerated in the latter stages.
Australia plundered 14 sixes in all, another record in this format.
England collapsed to 78-6 before Jamie Dalrymple (32) and debutant wicket-keeper Paul Nixon (31) took them up to a total of 144-9.
Ponting won the toss for the floodlit match at the Sydney Cricket Ground, where Australia had completed their 5-0 Ashes whitewash, and had no hesitation in opting to bat first.
His reasoning was that sides batting first had won the bulk of matches in the domestic Twenty20 competition.
Australia were well and truly under way as early as the second over, Anderson being hit for three boundaries by Matthew Hayden.
Anderson did remove Hayden in his following over, but the fast-scoring mantle was picked up by Ponting and Gilchrist.
Sixes rained onto the stands - Gilchrist hit five on his own - and it did not help when Ponting, on 16, was dropped by Jon Lewis off Andrew Flintoff.
"Sometimes you have to hold your hand up and say their batting was very impressive, very destructive and very powerful"
Finally, Panesar bowled Gilchrist off the inside edge and had Michael Hussey stumped.
Ponting was caught at fine leg off Paul Collingwood, Lewis making amends for his earlier miss, and Michael Clarke was run out cheaply.
There was a momentary lull before White and Symonds joined in the fun. Leg-spinning all-rounder White struck 40 from 20 balls and hit four sixes while Symonds smashed 39 from 22 balls.
England even had time to drop another catch in the final over, Kevin Pietersen shelling White at mid-wicket.
The difference in quality between England and Australia's fielding was highlighted when Pietersen was run out by a direct hit from third man by debutant Shane Harwood.
That came after Ed Joyce had fallen in the first over, and Flintoff in the second, both caught trying big shots before they had had a chance to settle.
And it was soon 54-4 when Michael Vaughan was lbw attempting a reverse sweep against Symonds.
Vaughan, in his first game for England since December 2005, had at least stroked four pleasing boundaries, including an eye-catching cover drive and a trademark swivel pull.
Nor did his troublesome knee appear to bother him unduly.
Ben Hilfenhaus, a 23-year-old Tasmanian and the other Aussie on debut, bowled some intelligent outswing in the middle overs, and finished with excellent figures of 2-16.
He had Collingwood caught at deep square leg and bowled Ian Bell with a low full toss.
With England long having effectively lost the match, a partnership of 49 between Nixon and Dalrymple averted the heaviest loss in Twenty20 internationals.
Leicestershire's Nixon, aged 36, finished not out and looks likely to secure the wicket-keeping berth for the one-day internationals.