MELBOURNE Australia reached 150-3 at the close of the opening day of the second test, punishing Sri Lanka after the visitors had failed to build on Kumar Sangakkara's landmark half-century and were dismissed for just 156 on Wednesday.
Openers Ed Cowan and David Warner charged to 95 without loss but Sri Lanka checked the hosts with three quick wickets following the drinks break in the final session at a sunbathed Melbourne Cricket Ground.
The mini-revival stalled, however, with two demoralising dropped catches late in the day that allowed Australia captain Michael Clarke (20 not out) and Shane Watson (13 not out) to survive a watchful final hour to stumps.
Sri Lanka won the toss and elected to bat first in glorious sunshine, but barring Sangakkara's elegant 58, which saw him notch his 10,000th test run, the tourists suffered a calamitous bout of stage-fright in front of a huge Boxing Day crowd of 67,000.
Only quick wickets in the morning session of day two may save Sri Lanka, with the MCG's drop-in pitch expected to flatten out in the sun and offer less for bowlers.
"We're definitely in a strong position. I think the two openers started exceptionally well," seamer Mitchell Johnson, who took his 200th test wicket and led the team's bowling with 4-63, told reporters.
"We're three down, we're 150 and we've got a great wicket, but we've just got to move on from that and we have a big day ahead of us to put on some runs."
After dismissing Sri Lanka just before tea, swashbuckling opener David Warner got Australia off to a flying start, blasting eight fours and a massive six over long on off the bowling of seamer Chanaka Welegedera.
Warner despatched Sri Lanka's pace trio to all corners of the ground before all-rounder Angelo Mathews ended his innings at 62 when he belted a pull shot straight to Dhammika Prasad in front of the rope at deep mid-wicket.
That precipitated a minor collapse, with number three batsman Phillip Hughes run out for 10 and Cowan caught behind for 36 six balls later.
Hughes fell in farcical circumstances, failing to leave his crease as Cowan charged through for a single after poking the ball to midwicket.
The misjudgement allowed the fielding Tillakaratne Dilshan enough time to fumble the ball before whipping it back to the stumps where replacement wicketkeeper Sangakkara whipped off the bails.
Cowan soon brought about his own downfall with an indiscriminate swipe at a Prasad delivery that flew into the welcoming hands of Sri Lanka captain Mahela Jayawardene at second slip.
Sri Lanka failed to maintain the momentum, however, with Dilshan dropping a sharp chance off Clarke in close, with the in-form Australia captain on six.
Clarke, who became the first man to score four double-centuries in a calendar year during Australia's lost test series to South Africa, went on to notch his 1,500th test run in 2012.
Watson, on five, edged a catch behind the wicket off the bowling of Welegedara, but Sangakkara spilled the diving chance.
Sri Lanka's woes were further compounded by a broken thumb to regular wicketkeeper Prasanna Jayawardene, and it was unclear whether he would take the gloves for the rest of the match.
It was all smiles for Australia, however, as their seamers reduced the tourists to 79-3 by lunch and took the last seven wickets for a paltry 77 runs.
Johnson, back in the side after being overlooked for Australia's first-test victory in Hobart, unleashed a mean spell of short-pitched bowling and missed out on a hat-trick straight after the drinks break in the middle session.
The mercurial left-armer captured his 200th test victim with the prized wicket of Sangakkara, but had birthday-boy Matthew Wade to thank, the 25-year-old wicketkeeper bolting 50 metres behind the wicket to take a brilliant lunging catch after the batsman sent a top edge soaring into the heavens.
Sangakkara had earlier become the 11th batsman in test history to reach the 10,000-run milestone and did it in style with a glorious cover drive for four off the same bowler in the final over before lunch.
The 35-year-old former captain bathed in a standing ovation and shook hands with the Australian team but his dismissal left Sri Lanka 147-8, snuffing out their hopes of a more competitive total.
While Johnson showed venom, and enjoyed fine support from seamers Peter Siddle (2-30) and debutant Jackson Bird (2-32), Sri Lanka's batsmen were culpable as they flashed carelessly on a wicket that deserved more respect.
"Pretty clearly we're back to playing catch up unfortunately," Sri Lanka coach Graham Ford said.
"We found ourselves doing that in the last test and we're desperate not to do it this time round, but that's what it is."
(Editing by John O'Brien)