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Graham Thorpe and Paul Collingwood led an England revival in Kandy after Sri Lanka had threatened to take an iron grip on the second Test.

The home side escaped from 278-8 to reach a first-innings 382.

England began their innings brightly with Michael Vaughan making a half-century but collapsed to 119-4.

At the close they were 163-4, 20 short of avoiding the follow-on, with Thorpe 20 not out and Collingwood, in his second Test, unbeaten on 19.

The day was partly overshadowed by an unsavoury incident involving Muttiah Muralitharan and Nasser Hussain.

Muralitharan complained former England captain Hussain had verbally abused him when he went out to bat, though match referee Clive Lloyd ultimately took no action.

Read more: Disappointed Lloyd clears Hussain

England will hope to put the incident behind them as they consider the task facing them on Friday.

They certainly let slip an advantage in the morning as Sri Lanka's last two wickets realised more than 100 valuable runs.

Dinusha Fernando hit an unbeaten 51, just the second half-century ever by a Sri Lanka number 10.

Andrew Flintoff took a wicket early in the day as Sri Lanka skipper Hashan Tillakaratne (45) hooked straight to Mark Butcher at long leg.

But neither Flintoff nor James Kirtley, the only two front-line pace bowlers in the team, could provide the sort of consistency needed to make further inroads.

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While Kumara Dharmasena played steadily, Fernando showed he was no batting rabbit, exhibiting some impressive drives.

Giles finally wrapped up the Sri Lanka innings with the wickets of Dharmasena for 29 and Muralitharan for 19, to finish with 5-116.

Dharmasena was lbw to a straight delivery striking him on the back leg and Muralitharan bowled by a ball that just skimmed the bails.

It took the TV umpire to confirm the last man's dismissal, with Vaughan appealing to the on-field officials to check with their colleagues.

England's bowlers were frustrated for much of the day

Muralitharan, on his home ground, had already lofted England's senior spinner for the second six of the innings, over long on.

And his arrival in the attack would bring similarly instant results as Marcus Trescothick was caught off bat and pad on the stroke of the tea break.

The next three batsmen were not allowed to settle, with the next to fall Butcher, stumped going down the track to Dharmasena.

Vaughan showed plently of confidence to hit 52 in good time before edging a Muralitharan leg-break to first slip.

And the reintroduction of pace brought the wicket of Nasser Hussain for 10, lbw to left-armer Chaminda Vaas.

It took a more watchful approach by Collingwood and Thorpe to steady England again. They have added 44 runs to date.

Sri Lanka: Hashan Tillakaratne (capt), Marvan Atapattu, Sanath Jayasuriya, Kumar Sangakkara, Mahela Jayawardene, Tillakaratne Dilshan, Thilan Samaraweera, Upul Chandana, Chaminda Vaas, Dinusha Fernando, Muttiah Muralitharan.