Australia avoided a two-day defeat in the third Ashes Test, but an embarrassingly heavy loss at Edgbaston looms large.

Australia were 7-168 at stumps on Thursday, holding a lead of 23 runs after recalled paceman Steven Finn snared a five-wicket haul.

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Peter Nevill will resume on 37 alongside Mitchell Starc, Australia needing a miracle to stop England taking a 2-1 lead in the five-Test series on Friday.

David Warner’s 77 helped ensure England would have to bat again. Photo: Getty

The only time a side has battled back from such a position to win an Ashes was in 1936-37, when Don Bradman led Australia to a 3-2 win after they trailed 0-2.

In 1972, Australia came back from 2-1 down to tie the series at The Oval but holders England retained the urn.

The ongoing Test in Birmingham has resembled a procession from the moment David Warner, Steve Smith and Michael Clarke fell inside the first hour on Wednesday.

It continued on Thursday, although Warner scored 77 and was the only batsman in Australia’s top six to reach double figures in the second innings.

Michael Clarke extended his barren run with a score of three, while Adam Voges continued his poor tour of England with a duck.

The 26-year-old Finn also accounted for Smith (8), Mitch Marsh (6) and Mitchell Johnson (14) – his wickets caused by a mix of bounce, express pace and poor shots.

Finn dismissed Clarke and Voges with consecutive balls, both of the out-of-sorts batsmen out edging.

Playing his first Test since being belted all over Trent Bridge in the 2013 Ashes, Finn snared 4-25 in an incredible eight-over spell either side of tea.

In a worry for England, James Anderson left the field with a side strain in the final session. Photo: Getty

Finn will return to Nottingham, where the fourth Test starts next Thursday, as arguably the form bowler of the current series.

Jimmy Anderson, who trudged off with what seemed to be a side strain in Thursday’s third session, is England’s only major concern.

There will be plenty of issues for Australia to mull over.

Woeful collapses of 5-60 in the first dig and 4-30 on Thursday are the most alarming.

There will be questions of technique and temperament.

“There might be a few changes,” Shane Warne said on Sky Sports.

“If the top order doesn’t get runs, it starts to look a bit brittle.”

Johnson dismissed Jonny Bairstow and Ben Stokes in a sensational opening over on Thursday, both men gloving bouncers to Nevill.

It gave the tourists genuine hope.

England held a six-run lead at that point and were somewhat vulnerable at 5-142.

Instead Joe Root and Moeen Ali posted half-centuries as the hosts added 148 runs after resuming at 3-133.

Australia chipped away at England’s first-innings lead of 145 runs with early success, reaching 1-62 in the 13th over.

Finn’s first over went for 14 runs, while Warner passed 50 in just 35 balls to equal Graham Yallop’s record for the fastest Ashes half-century.

It unravelled spectacularly when Finn dismissed Smith for the second time in the match, a sloppy pull shot resulting in a skied edge that landed straight in the lap of keeper Jos Buttler.

– AAP