Earlier Jason Robinson had scored a stunning try moments before the break as England seized control of the game to hold a 14-5 lead.
But despite piling on the pressure they couldn’t add any more points as errors started to creep into their game in the second half and paid the price.
Elton Flatley added two penalties to pull his side back into the game and set up a compelling last 20 minutes.
England set up camp deep in enemy territory, Jonny missed with one drop goal, but it was still anyone’s game going into the last 10 minutes before Flatley kept his nerve to send the game into extra-time.
Australia had made a bright start to the game and opened the scoring with a copybook move, Larkham’s cross-kick was too high for Robinson as Lote Tuqiri stretched above him on the line to score.
But England’s pack quickly gained the upper hand in the scrums and lineouts to sap the life out of their more inexperienced opponents, who were forced into mistakes at the breakdown.
David Lyons flopped over the wrong side of a ruck to give Wilkinson his first penalty from 48 metres out in the 12th minute.
Then Larkham tackled Cohen without the ball to allow Wilko to score his second from a similar distance.
England then blew a gilt-edged chance when they created an overlap on the right, only for Ben Kay to knock on with the line at his mercy.
It didn’t appear to matter, though, when Wilkinson added another three points after Australia dragged down a scrum and Robinson struck to send the 30,000 travelling fans into orbit.
A poor clearance was run back at Australia with Dallaglio and Wilkinson combining through the middle to give Robinson the opening to surge over on the right.