England's Ashes dream moved a step closer to reality as they held their nerve in another thrilling finish to clinch a three-wicket victory in the fourth Test and claim a crucial lead in this summer's series.

Chasing a modest 129 runs for victory on the fourth evening, England's task seemed straightforward until Shane Warne was introduced in the sixth over and immediately spun panic among the ranks.

Warne claimed three for seven in 29 balls to leave England reeling on 57 for four and, despite Kevin Pietersen and man of the match Andrew Flintoff adding a priceless 46 runs, it took a brave eighth-wicket stand between Ashley Giles and Matthew Hoggard to clinch victory.

It was not until Giles pushed Warne through the on-side to score the winning runs shortly before 6.30pm that England's victory was confirmed.

Another capacity Trent Bridge crowd had expected to witness a relaxed and comfortable progress towards the win in stark contrast to the previous two Tests, when England narrowly clinched victory at Edgbaston and came within one wicket of winning at Old Trafford.

But for the third time in the series these two sides conjured up another emotional roller-coaster of a finish to set up a thrilling showdown in the final Test at the Oval on September 8, when another capacity crowd will queue up hoping to witness England's first Ashes series win since 1987.

England have already ensured Australia cannot win the series for the first time since that historic series Down Under but they can still retain the Ashes by bouncing back from another close defeat to draw the series in a fortnight.

This latest triumph was a tribute to the collective will of England's vibrant side, who overcame the loss of Simon Jones while he received treatment on a sore right ankle to dismiss Australia for 387 and leave them facing a comfortable victory target of 129.

Unlike Headingley 1981, when Australia memorably failed by 12 runs to chase down a victory target of 130, England finally overcame their nerves with Giles and Matthew Hoggard combining to add the 13 runs required for victory.

For a long time during the fourth day, Australia's determination looked set to thwart England's desire to wrap up victory quickly after they set out with a cautious and defensive policy designed to use up time with the hope they could get far enough ahead to set a tricky victory target.

Resuming 37 runs adrift on 222 for four having been forced to follow on, they successfully frustrated England for 28 overs using watchful tactics not previously seen in a series where both sides have revelled in their commitment to attacking strokeplay.

Michael Clarke successfully resisted his liking for quick scoring and combined well with Simon Katich, who delights in defiant innings in just this sort of situation, and forged a 100-run stand.

They added only 39 runs during their time together during the opening session until Clarke's resolve was finally broken by Matthew Hoggard, who tempted him into nudging outside off stump off the back foot and he edged behind to wicketkeeper Geraint Jones.

That catch must have come as a considerable relief to Jones, who had missed the regulation stumping of Clarke the previous evening when he was on 35 and was relieved he was restricted to only 21 more runs.

His demise came just one over before lunch and gave England the impetus to run through the remainder of Australia's resistance in the 28 overs before the next interval, despite useful innings from Simon Katich, Shane Warne and Brett Lee.

Katich had battled for 261 minutes to carefully stabilise the innings and score 59 priceless runs but his dismissal to another contentious umpiring decision - this time Aleem Dar upholding Steve Harmison's appeal to a delivery which appeared to be bouncing over the stumps - virtually broke Australia's resistance.

Warne slogged 45 off 42 balls while Lee finished unbeaten on 26, having also been reprieved by wicketkeeper Jones when he dropped a one-handed catch off Harmison in front of first slip Marcus Trescothick before he had scored.

Fortunately for Jones, who also fluffed a possible run out of Lee before he had scored, it was another mistake which did not prove that influential towards the result and, with Harmison cleaning up the tail, Trent Bridge got ready to celebrate a comfortable victory.

Marcus Trescothick led the charge by hitting 27 off 22 balls, exploiting two wayward overs from Michael Kasprowicz with the new ball, but the introduction of Warne as his replacement in the attack changed the mood of the match.

Warne struck with his first ball with Trescothick pushing forward defensively and edging low to captain Ricky Ponting at silly point and followed that by removing Michael Vaughan with the first ball of his next over, this time inducing an edge to slip.

By the time Warne also dismissed Andrew Strauss, caught low at leg slip which needed referral to third umpire Mark Benson to clarify, England's nerve was beginning to fray as was underlined by Ian Bell's ill-timed decision to pull Lee straight to the safe hands of Kasprowicz in the deep.

Just as England believed Flintoff and Pietersen would guide them to victory, Lee returned to claim both scalps and with Geraint Jones gifting Warne his 50th wicket this year by holing out to the deep, it set up another tense and nervous finish which Giles mastered to bring frenzied celebrations to the ground.