England demolished Australia's scrum but were found wanting in other departments as the Wallabies won in Perth.
Martin Johnson's men earned two penalty tries and Wallabies prop Salesi Ma'afu was sin-binned as England dismantled Australia's set-piece from the first minute.
But England could not match the Wallabies' attacking prowess and fly-half Quade Cooper touched down twice after Rocky Elsom had scored the opening try.
England have now not won a Test match south of the equator in 11 attempts since Johnson himself lifted the Rugby World Cup in Sydney seven years ago.
Johnson's record since being appointed England coach now shows just eight wins from 22 Tests - a worse return than his predecessors Brian Ashton and Andy Robinson.
This was seen as England's best chance to beat the Wallabies on Australian soil since that World Cup triumph.
Injuries meant the Wallabies were forced to field their least experienced front row in 27 years, while star centre Matt Giteau was ruled out yesterday with a hip injury.
Debutant loosehead prop Ben Daley, hooker Saia Faingaa and tighthead Ma'afu boasted just two caps and one Test start between them, while Giteau was replaced by Berrick Barnes.
England duly demolished the home pack but still spent the opening half hour camped in their own half, desperately trying to plug holes in their defence.
After 30 minutes, the Wallabies had made just nine tackles such was their control of the game and England were fortunate to only be 14-0 down.
Luke Burgess, Australia's second-choice scrum-half, was running England ragged and his blind-side break would have created the opening score but for a brilliant last-ditch tackle from Chris Ashton.
But it was finger-in-the-dam stuff from England and the inevitable try came when Drew Mitchell counter-attacked from Danny Care's clearance.
Mitchell beat Ashton to race into the England 22 and when the ball was whipped wide, Elsom galloped over for the opening try.
Referee Nigel Owens lectured Australia's disintegrating front row but Flood missed with a 48-metre penalty and England's attacking play was laboured and error-strewn.
Tom Croft finally got involved with his first carry of the day, but just when England thought they had put Mark Cueto through a gap, referee Owens called them back for a knock-on.
In contrast, the Wallabies were ruthless. Elsom stole a lineout from Croft, and Burgess left Hape flailing in midfield before flicking the ball for Cooper to score under the posts.
England took the bold option of kicking a penalty for touch and spent the remainder of the half camped inside Wallaby territory, but came away empty handed.
Care was scragged as he tried a sniping run and Simon Shaw carried with intent but the Wallabies' aggressive defence drove England backwards.
England's attack simply could not ask enough questions, and when Hape did offload in the tackle for Tindall, referee Owens ruled it had drifted forward.
Lewis Moody scraped himself off the turf after catching Mitchell's elbow in a tackle early in the second half.
Flood put England on the scoreboard after another scrum penalty early and Ben Foden then atoned for a shocking clearance by launching a counter-attack from deep.
Ashton surged into the Australian half and Tindall burst 30 yards before being hauled down, but England were throwing the kitchen sink at the Wallabies.
Shaw and Steve Thompson were halted on the line and it took four men to stop Dan Cole's drive under the posts before Croft spun over the line but he was held up.
England had the Wallabies under immense pressure at the ensuing five-metre scrum and after two re-sets referee Owens awarded the penalty try.
Incredibly England were back within four points - but not for long.
Cooper threw a beautiful cut-out pass to winger Digby Ioane, who was halted by Cueto's tackle but offloaded back inside where the Wallaby fly-half scored his second try of the game.
England sent on Ben Youngs for Care and the Leicester scrum-half brought some snap to their game while Courtney Lawes came on for Shaw.
Tindall tried to drive over before Youngs snared Burgess in possession as England won the turnover close to the Australian line.
Tom Palmer, Youngs and Cueto all had a go but Australia held firm and Tim Payne spilled the ball in a tackle from Barnes, allowing Cooper to clear his lines.
England came back at Australia again.
Ashton almost broke through under the posts but his offload went to ground.
James O'Connor tried to launch a 90-metre counter-attack but his pass drifted forward. England once again cranked up the scrum pressure and Australian tighthead Ma'afu was sin-binned.
Daley, who had just been substituted, returned to the fray as England sent on David Wilson. The scrum buckled again and referee Owens awarded a second penalty try.
O'Connor extended the Wallabies' lead to 24-17 and Cooper sealed Australia's victory.