Eddie Jones asked what a failure was.

This Wallaby tour will certainly go down as one after the thrilling 32-31 Cook Cup loss to England at Twickenham followed last week's dismal defeat to Ireland and a dour win over Argentina a fortnight ago.

But, despite a lack of attacking creativity from the world champions in the first half, an inability to wrap up the match after leading 31-19 with 25 minutes left and three losses in a row to England for the first time in history, Australian coach Jones found a positive spin.

"What's a failure? I think we've moved on. I think we're a better side than we were this time 12 months ago," Jones said.

"I'm quite happy. We're starting to move in the right direction.

"A tour's judged by tangible and intangible results. Tangible results, yes we've lost two or three games so that's a tangible failure. But the intangible is that we've moved on as a side.

"We had five guys out of the 22, all playing their first year of Test rugby.

"We're starting to get some talent in the squad, we're starting to get a few more options, we've just got to keep moving down that direction."

For once Jones and English counterpart Clive Woodward were in agreement.

"That's the best Australia team of the last three years," said Woodward. "It was a very big scalp to take."

England's win was its 17th successive victory at Twickenham dating back to the last World Cup but Jones warned it faced a tougher challenge when Australia defends the Cup on home soil next October.

"England are a very good team here (at Twickenham). But their big test will be winning away from home," said Jones.

Jones will have to think carefully to field a fully fit side in next Saturday's final Test against Italy in Genoa, with playmaker Stephen Larkham (broken hand) and hooker Jeremy Paul (rib cartilage) ruled out of the tour.

They join Mat Rogers, Ben Tune and Owen Finegan in making early exits.

Fortunately Italy don't appear up to much, losing 36-6 to Argentina in Rome today.

Promising adventure and attack, Jones pulled a surprise by playing selected inside centre Elton Flatley at five-eighth and switching Stephen Larkham to fullback with Matt Burke going back to the centres.

Flatley provided the brightest note in a team which tried to attack but was badly handicapped through lack of possession caused by handling turnovers.

He scored two tries, one a near length of the field try effort from a turnover against the run of play in which he surprisingly outpaced England fullback Jason Robinson.

The other major Australian achievement was scoring three tries to England's two while making almost three times as many tackles.

When he named Larkham alongside Flatley on Thursday, Jones said he wanted to get the ball wide.

But in the first half today, the ball rarely got past the first receiver who barged his way up the middle and into the defence.

Next phase would be the same and the next as well until Australia lost possession to allow England to shine with creative and clever lines and angles, regularly forging gaps up the middle and finding plenty of space out wide, especially on Wendell Sailor's right wing.

The Wallabies were lucky to be still in the match at halftime, but then turned the game around with 22 points in eight minutes.

Winger Ben Cohen was set up for England's first try in the ninth minute by James Simpson-Daniel as they caught Sailor out of position.

Jonny Wilkinson's conversion, the first of nine successful kicks from nine attempts, made it 7-0 which Burke cut to 7-6 with two penalty goals after 15 minutes.

Three penalties to Wilkinson gave England its 16-6 lead deep into injury time when Flatley scampered through a huge gap close to the posts to close to 16-13 at halftime.

Sailor scored his first Test try three minutes after the break following gutsy lead up work by Toutai Kefu and a great break and long ball by Larkham.

Five minutes later, Flatley picked up a ball which spat out of an England maul and raced 80 metres to score and the Australians were suddenly 28-16 ahead.

But they were unable to maintain enough possession as England's forwards started to assert themselves again.

With Wilkinson knocking over the penalties, England was back in the game at 31-25 with 15 minutes to go and the momentum and a roaring 75,000 crowd right behind it.

After several minutes of concerted pressure, Cohen scored again when he stepped inside George Gregan to give England its winning 32-31 lead.

Burke could have stolen the match back for Australia with five minutes left but sent his penalty attempt from 41 metres out just to the right - his third miss from nine kicks.

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