Australia reached 1-143 at lunch on Sunday's fourth day of play at the MCG chasing a target of 231 to win.
The home side added 113 in the session for the loss of one wicket.
With spinner Monty Panesar struggling for form, pace spearhead Stuart Broad playing on painkillers because of a foot injury and skipper Alastair Cook dropping catches in slips, various misfields on Sunday morning have only added to England's woes.
Australia's goal of a 5-0 sweep remain firmly in view with opener Chris Rogers unbeaten on 81 and Shane Watson on 36 not out.
Hampered by a groin strain, Watson has looked untroubled by England's bowling and has struck four boundaries.
Rogers has scored his third half-century in his past three Test innings and appears headed for his second Test hundred and first of the summer.
A regular fixture at the MCG as a Victoria opener, Rogers has hit nine fours from 109 balls, making light of the general struggle by batsmen in this match to get on top of the bowlers.
Cook dropped two catches at first slip in the first six overs of the day, giving chances to Rogers on 19 and David Warner on 22.
Broad reacted with hands on hips in a teapot stance after wicketkeeper Jonny Bairstow failed to attempt a catch from Rogers and Cook moved late.
Cook had no excuses though with Warner's dropped chance which was a sitter at waist height off Ben Stokes' bowling.
Warner added three more runs before his attempted upper-cut off Stokes was caught by Bairstow at 1-64.
Australia haven't successfully chased a target of over 200 in an MCG Test since 1960-61 against West Indies. But this England side look incapable of bowling out the home side based on Sunday morning's display.
ENGLAND FIRST INNINGS 255
AUSTRALIA FIRST INNINGS 204
ENGLAND SECOND INNINGS 179
AUSTRALIA SECOND INNINGS
C ROGERS not out 81 (109)
D WARNER c Bairstow b Stokes 25 (47)
S WATSON not out 36 (55)
Sundries (1nb) 1
One wicket for 143
Fall: 64 (Warner).
Bowling: J Anderson 9-2-19-0, S Broad 7-0-38-0, M Panesar 4-0-21-0, B Stokes 7-0-35-1 (1nb), J Root 4-1-8-0, T Bresnan 4-1-22-0.
Batting time: 158 mins. Overs: 35.
Umpires: Aleem Dar (PAK), Kumar Dharmasena (SRL).