SHANE Warne made history by claiming his 700th Test match wicket as England slumped to 159 all out on the opening day of the fourth Ashes Test.

Warne claimed five for 39, the 37th five-wicket haul of his career on a rain-hit opening day at the MCG.

By the close of play Australia had reached 48 for two in reply.

Warne entered his final home town Test before his retirement needing just one more wicket to reach the milestone and the majority of the 89,155 Boxing Day crowd were there to witness the moment.

He achieved it with his 20th delivery after England had obliged the crowd by winning the toss and deciding to bat first and then collapsing by losing their last eight wickets for only 58 runs.

Australia's seamers dominated the early stages in ideal conditions, but once Warne was given his chance in the 47th over of the innings he wasted no time in striking.

Tempting opener Andrew Strauss into driving off the front foot in his fourth over of the spell, Warne delivered a sharply-turning leg-break which spun into the stumps.

Warne's breakthrough followed just two balls after Paul Collingwood had edged fast bowler Brett Lee to Ricky Ponting at second slip to end an encouraging 57-run partnership between the pair.

It was England's last stand of any note with Warne claiming only his third five-wicket haul in Melbourne after seamer Stuart Clark claimed the key wicket of England captain Andrew Flintoff shortly after tea, edging to the leg-spinner at first slip.

Warne claimed his second victim when Chris Read, recalled after England decided to drop under-fire wicketkeeper Geraint Jones, drove straight to short extra cover seven overs later.

Veteran seamer Glenn McGrath claimed an overdue success with Sajid Mahmood edging behind and Warne took his tally to 702 when Steve Harmison drove him straight to mid-on.

The key wicket was that of Hampshire team-mate Kevin Pietersen, who battled for over 100 minutes at the crease for his 21 before holing out to Andrew Symonds at long on.

Symonds was also the catcher, this time at mid-on, to finish off the innings with Monty Panesar driving straight to him to give Warne a fairytale start to his final MCG Test.

Facing 11 overs before the close, Australia took an aggressive response and enjoyed a 44-run opening stand in only 10 overs after Matthew Hayden twice survived strong lbw appeals from seamer Matthew Hoggard.

But Flintoff, perhaps enraged by umpire Rudi Koertzens decision to reject the appeals, struck twice in successive balls to have Justin Langer and nightwatchman Lee caught behind.

Flintoff's hat-trick ball drifted down the leg side but at least England had regained some hope from an opening day once again dominated by Australia and the irrepressible Warne.