Stuart Appleby has emerged from a form funk to grab the clubhouse lead after his third round of the Australian Open at The Lakes in Sydney.

The 2001 champion mixed four birdies with two late bogeys to sign off for a two-under-par 70 on Saturday.

Appleby briefly seized the outright tournament lead before his back-nine stumble left him at three-under for the championship heading into Sunday’s final round.

A nine-time winner in America, Appleby has had to use a one-off career exemption to retain full playing rights on the US Tour in 2013 after failing to finish among the top 125 money earners this year.

“I feel like I’m coming back,” Appleby said. “My game is definitely on the uptake.

“Mentally, I’ve really struggled the past year or more, nearly two years, to I guess believe in myself, believe in all the great things that I’ve done, (to remember) that I was that person.

“And if you struggle with your self-belief, you’re pretty much going to struggle with your scorecard.

“So I’ve been working very hard on that and that’s a progress in the making.”

Appleby’s American playing partner Kyle Stanley is also safely in the clubhouse at three under after carding his own third-round 70.

Pre-tournament favourite Adam Scott is one behind Appleby and Stanley after eking out his second successive 71 to be at one under.

The day’s best round so far belongs to Scott Gardiner, whose four-under 68 has him at two under for the tournament.

Gardiner had four birdies in a row on the back nine, as did 19-year-old amateur Cameron Smith, whose 69 has him at one under and in the mix.

Defending champion Greg Chalmers also made a move, clawing his way back into red figures with a three-under 69.

But veteran Tom Watson crashed out of contention, following his superb 68 on Friday with another horror six-over 78, the same sorry score he had on the opening day.