Australia suffered a dramatic collapse on the third day of the third Test at the WACA as they slumped to 137 for eight in their second innings after bowling West Indies out for 312 to set up the game for an exciting finish.

The Windies looked out of the game when dismissed just after lunch, 208 behind Australia. But Sulieman Benn (two for 26), Dwayne Bravo (three for 34) and Kemar Roach (one for 18) bowled them back into the match with Australia losing seven wickets for 68 runs to establish a lead of 345 at stumps.

The West Indies came into Day Three on 214 for two in reply to Australia's 520 for seven declared and had made steady progress to be 280 for four at lunch.

But that was when the drama began. The Windies lost six for 32 after the first interval to miss the follow-on target.

The tourists lost their last four wickets for just two runs off 10 balls.

Australia elected to bat again and were moving on solidly with Michael Clarke and Shane Watson together after Simon Katich was out early for 10.

But the hosts then lost six wickets for 59 runs to slip to 125 for seven with Ricky Ponting coming in at number nine due to a tendon injury in his elbow.

Roach immediately came on to pepper him with short balls and after he got one hook shot away, he fended one straight to short leg to be out for two and leave Australia on 134 for eight.