Man-of-the-match McGrath, who finished with four for 29 and match figures of nine for 82, saw Australia home with ease in just 50 minutes play yesterday after rain delayed the fourth day’s start by over four hours.
The last four England batsmen were all out for nought on a day when Test debutant Kevin Pietersen was the only batsman to mount any resistance.
He finished on 64 not out, with two sixes and six fours off 119 balls, to add to his first innings knock of 57 of his team’s 155.
Leg-spinner Shane Warne extended his world record of Test wickets to 589 as Australia, winners of the last eight Ashes series, maintained their run of not losing a Lord’s Test since 1934.
England resumed on 156 for five, needing a further 264 to reach what would be a Test record fourth innings winning total of 420.
Pietersen was 42 not out and Geraint Jones six not out after Brett Lee and Warne had combined to spark an England collapse that saw five wickets lost for 39 runs after England had been 80 without loss on Saturday.
Yesterday, McGrath, who had taken five for 53 in the first innings, and in the process joined Warne as one of only four bowlers with 500 Test wickets, opened the bowling.
But Warne, despite the overcast, swing friendly conditions, was given the second over of the day by captain Ricky Ponting and soon turned a leg-break past the outside edge of Jones’s bat.
However, it was McGrath who had Jones out for his overnight score when the keeper’s miscued pull gave Jason Gillespie at mid-on a simple catch.
And two balls later McGrath dismissed Ashley Giles for nought after the left-arm spinner steered a catch to Matthew Hayden in the gully.
England were now 158 for seven with renewed rain their only realistic hope of saving the game.
New batsman Matthew Hoggard then found himself facing Warne with five men plus wicket-keeper Adam Gilchrist round the bat.
But another rain break after 20 minutes and 23 balls play at 3.05pm saw England given ten minutes of respite at 159 for seven with Pietersen 45 not out and Hoggard on nought.
Hoggard, who before this match had questioned the 35-year-old McGrath’s stamina and suggested he may have been past his peak, then found himself having to evade a bouncer from the New South Wales quick bowler.
Pietersen was taking singles early in the over and while this showed confidence in his partner it meant Hoggard was left facing more of McGrath.
And it was no surprise when McGrath had Hoggard plumb lbw for his second nought of the game leaving England 164 for eight.
McGrath had taken three wickets for two runs in 16 balls.
Pietersen then completed his second fifty of the match with a pulled two off Warne, his captain at Hampshire, having faced 68 balls with one six and eight fours.
The 25-year-old batsman then gave home fans something to cheer when he swept Warne for six.
Warne though joined in the fun by bowling a bouncer at Pietersen who next ball straight drove him for four.
But as that was off the last ball of the over it meant last man Simon Jones was facing McGrath and next ball the Glamorgan quick edged to Warne at first slip to end the match.