Australia A skipper Ed Cowan fell agonisingly short of a century as the England Lions seized the initiative in their four-day match at Old Trafford.
The home side were 3-158 at stumps on day three for an overall lead of 196 after earlier bowling out Australia A for 277.
Cowan was caught behind off James Tredwell (3-93) for 99, the skipper joining Michael Klinger (66) in putting the tourists in a strong position at 3-207 at lunch.
But they crumbled after the break to lose 7-63, Lancashire spinner Simon Kerrigan the destroyer with 6-59.
He had taken 0-35 off his first 13 overs before claiming six wickets at a cost of 24 runs off 73 deliveries as the Australian batsmen wilted before his combination of bounce, deviation and flight on a turning pitch.
Bowling from the Pavilion End on his home ground, he had Tim Paine caught at slip for 19 before the 23-year-old had Peter Forrest lbw attempting a sweep for 24.
He then removed two Test players with successive deliveries, Mitchell Johnson caught at short-leg for one before Nathan Lyon was lbw when completely deceived by a quicker ball.
From 8-231 Jon Holland contributed a useful 17 before Jackson Bird was caught at slip with Tom Cooper left stranded on 26 not out.
But the suffering was not over for Australia A, with Joe Root and Jonny Bairstow sharing a 128-run partnership for the second-wicket after makeshift opener Eoin Morgan was out for a duck.