Australia were routed for 98 in their lowest total in 133 years of Ashes Tests at the Melbourne Cricket Ground as England closed in on retaining the famous urn in the fourth Test on Sunday.
England's bowlers had the Australians all at sea on a seaming MCG drop-in wicket to bowl out the home team in just 42.5 overs.
James Anderson (4-44) and Chris Tremlett (4-26) did the damage, while wicketkeeper Matt Prior took six catches as all the Australian wickets fell to catches behind the wicket.
Australia crashed to their lowest MCG total in 54 Ashes Tests since their 104 in the second innings of the very first Test at the ground in 1877.
England capitalised on winning a vital toss to put Australia in on a lively green-tinged pitch to leave Ricky Ponting's team in disarray.
Only five batsmen reached double-figures as the English pacemen revelled in the swinging conditions to destroy the Australian innings.
Australia endured another one of their familiar top order batting crashes, succumbing to 77 for six in 34 overs, but this time there was no fighting rearguard as in the other Tests of the series.
Australia were 143 for five in their first innings in Brisbane and went on to make 481; 156 for five before reaching 245 in the first innings in Adelaide and 69 for five on the way to 268 in the first innings in Perth.
Ponting's wretched Ashes series continued with another cheap dismissal when he was out for 10, while Mike Hussey suffered his first batting failure of the series with eight.
Australia were always on the backfoot from the loss of the toss as England picked up the wickets of both openers Shane Watson (5) and Phillip Hughes (16) along with Ponting and Hussey to seize the early advantage by lunch in the crucial match of the series locked at 1-1.
England only need to win one of the remaining two Tests to retain the Ashes.
Ponting has struggled for runs in the series with six low scores and just one half-century in seven innings.
The skipper, playing with a fractured left little finger, was out when he edged a Tremlett outswinger to Graeme Swann at second slip.
England snared the big wicket of Hussey, caught behind off Anderson and the Australians crumbled after lunch, losing six wickets for 40 in 18.2 overs.
Smith pushed at a swinging Anderson delivery to be snapped up by Prior for six and there was a procession of Australian batsmen back to the dressingroom with Michael Clarke (20), Brad Haddin (5) and Mitchell Johnson (0) all caught behind off the seaming wicket.
England last won a famous victory here in 1998 with Dean Headley taking 6-60 in the second innings as the tourists won by just 12 nail-biting runs.
Australia's only loss at the MCG this decade was against South Africa two years ago as the Proteas went on to win their first-ever series in Australia.