Sven-Goran Eriksson's England experiment failed to find a winning formula as Australia cruised to victory at Upton Park.
Eriksson's decision to field two separate sides in each half backfired as Frank Farina's Socceroos earned a well-deserved win.
But it was England's senior line-up that let the coach down with a dismal opening half that saw Australia score through Tony Popovic and Leeds United's Harry Kewell.
"
I felt it wasn't as bad as the result looked
"
England captain
David Beckham
And it was left to debutants Wayne Rooney - England's youngest international at 17 years and 111 days - along with Francis Jeffers and Jermaine Jenas to provide the bright spot of the evening.
The rookie trio combined for the Arsenal striker to pull a goal back on his debut, but Brett Emerton's late third goal gave Australia another sporting triumph over the old enemy.
Eriksson's first choice team was left to look distinctly second best in an dreadful opening 45 minutes for England.
Australia - inspired by Kewell - dominated in midfield and terrorised England down the flanks.
And Australia took advantage of woeful England marking to take the lead after 15 minutes.
Stan Lazaridis' free-kick saw Popovic lose his marker Gary Neville at the far post to head past David James.
Paul Scholes had the ball in net for England five minutes later, but the strike was ruled out for a foul by debutant James Beattie.
Michael Owen's lack of confidence was betrayed by two missed chances before Australia doubled their advantage four minutes before the interval.
Kewell robbed Rio Ferdinand and skilfully rounded James to score.
Eriksson resisted the temptation to stick with his original line-up, making eleven changes that included the history-making Rooney.
And the Everton teenager almost made an instant impact with a cross that set up Darius Vassell, but he failed to find the target.
ROONEY'S RECORD
Rooney was instrumental as substitute Jeffers rewarded England's much-improved second-half show after 69 minutes.
He found Jermaine Jenas on the right flank, and his cross was expertly glanced past Mark Schwarzer at the near post by Jeffers.
England's youngsters continued to impress - but Australia sprung a counter attack to clinch victory with seven minutes left.
Substitute John Aloisi beat Ledley King and set up Emerton for a simple finish to seal an impressive win.
England: James (Robinson 45), Neville (Mills 45),
Ferdinand (Brown 45), Campbell (King 45),
Ashley Cole (Konchesky 45), Beckham (Hargreaves 45),
Lampard (Murphy 45), Scholes (Jenas 45), Dyer (Vassell 45),
Beattie (Jeffers 45), Owen (Rooney 45).
Subs Not Used: Wright, Joe Cole, Upson, Parker, Davis.
Australia: Schwarzer, Neill, Moore, Popovic (Vidmar 72),
Lazaridis, Emerton, Okon (Muscat 87), Skoko (Bresciano 45),
Chipperfield (Grella 76), Viduka (Sterjovski 85),
Kewell (Aloisi 56).
Subs Not Used: Kalac, Tiatto.
Booked: Lazaridis.
Attendance: 34,590.
Referee: Manuel Enrique Mejuto Gonzalez (Spain).