Australia booked their place in the final of the Four Nations, but if England meet them there they will be confident of their ability to at least give them a game. Steve McNamarawas furious about decisions for two tries and the Kiwi referee Henry Perenara's failure to send off Tony Williams for a high tackle.
"They were two poor decisions, wrong decisions," said the England coach, who blamed Australia's complaints about last week's refereeing for the way key calls went against his side. "There was a lot of pressure on the guy in the middle and he could have dealt with it in a different manner. I do think he was put under unfair pressure."
McNamara admitted, however, that his own players' mistakes were the prime cause of their downfall. They have to beat New Zealand on Friday night and they have major doubts over the fitness of three senior forwards – James Graham, Gareth Ellis and Jamie Peacock.
Wembley was never going to be full but the crowd beat the 41,135 for Great Britain against Australia in the last Test at the stadium, 14 years ago. That justified taking the tournament to the capital and the crowd saw England produce a dominant first 10 minutes, culminating in Ryan Hall's first try. Rangi Chase had been running at Australia and when he did so again, Kevin Sinfield took his pass and shipped it on to the Leeds winger. He was tackled by Billy Slater but was ruled by the video referee, Ian Smith, to have touched down before coming into contact with the corner flag.
Slater, who was voted the world's best player last week, went off with a broken collarbone. Not that his misfortune prevented his side from making a rapid response, his replacement at full-back, Darius Boyd, coming into the line to help Luke Lewis to score in the corner.
Sam Tomkins was causing all kinds of trouble, but England squandered a series of attacking positions with careless handling. They seemed to have paid for that when, after Chase tried a misconceived 20-metre drop-out in the hope of catching out the Aussies, the giant substitute Williams scored a try that recalled Mal Meninga in his pomp. Taking a pass from Darren Lockyer, he simply removed Chris Heighington with a destructive hand-off. Johnathon Thurston kicked his second goal.
England were still making breaks and half-breaks and they got their reward just before half-time when Tomkins made the initial incision and Jack Reed supported and timed his pass perfectly to give Hall room to squeeze in at the corner.
The second half began horribly, with Tom Briscoe's fumble, a soft penalty and an equally soft try for Greg Inglis. Soon after that, Australia were lucky not to have Williams sent off for an ugly head-high tackle on Ben Westwood. Briscoe could have had a try if Perenara had gone to the video referee instead of disallowing it for a double movement. Anthony Watmough was fortunate too when he was the instigator of a brawl.
England's low-point was the way Paul Gallen went straight between two defenders for a try which seemed to end their hopes. That reckoned without Reed, the Keighley-born Aussie who has scored in all three of his games for England. He leapt to catch Sinfield's kick and coasted to the line. Boyd kept the Kangaroos in front, but a superb backhand flick from Tomkins to Heighington kept the match just about alive.
The outstanding Thurston's interception from Chase led to Chris Lawrence's try to finish it – it looked dubious at least. England had lost, but they had shown enough to prove that they could beat Australia on another day.
England: Tomkins; Hall, Reed, Yeaman, Briscoe; Sinfield, Chase; Graham, Roby, Peacock, Eliis, Westwood, Heighington. Substitutes used: Widdop, Morley, Jones-Buchanan, Wilkin.
Australia: Slater; Uate, Inglis, Lawrence, Boyd; Lockyer, Thurston; Gallen, Smith, Scott, Lewis, Thaiday, Watmough. Substitutes used: Cronk, Galloway, Shillington, Williams.
Referee: H Perenara (New Zealand)