Australia's Steve Smith took his run-spree, this Ashes, to a new level as he returned to international cricket with a superb double century against England in Manchester on Thursday.

Smith's 211 was the cornerstone of Australia's commanding 497-8 declared on the second day of the fourth Test at Old Trafford.

England then lost makeshift opener Joe Denly for four when his rapid glance off fast bowler Pat Cummins was brilliantly caught at the second attempt by Matthew Wade at short leg.

England were 23-1 at stumps, 474 runs behind, with Rory Burns 15 not out and nightwatchman Craig Overton unbeaten on three.

They now face an uphill task to deny Australia a win that would see the holders retain the Ashes at 2-1 up with one to play in a five-match series.

Smith, the world's top-ranked Test batsman, missed England's series-levelling one-wicket win at Headingley with a concussion suffered when struck by a Jofra Archer bouncer during the drawn second Test at Lord's.

Even so, he has now made 589 runs this series, his first since completing a 12-month ball-tampering ban, including three hundreds at a colossal average of 147.25.

This innings followed his scores of 144 and 142 in Australia's 251-run win in the first Test at Edgbaston, with Smith's lowest total in four knocks this series the 92 he made at Lord's.

"Satisfying to get a big score out here," Smith told reporters after stumps. "Obviously it was disappointing to miss the third Test at Headingley. I wasn't quite right, wasn't able to play there, the right call was made. It gave me time to recover and get my head right. I felt good coming in to the game, was confident and fortunately I scored some runs and we got ourselves in a nice position."

The 30-year-old former Australia captain was, however, dropped on 65 on Thursday when fast-bowler Archer failed to hold a caught and bowled chance off a hard-hit full toss.

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Smith was also reprieved on 118 when caught by Ben Stokes at slip off Jack Leach only for replays to reveal the left-arm spinner had bowled just the eighth no-ball of his first-class career.

"No-one means to bowl one or drop catches," said England wicketkeeper Jonny Bairstow, who praised Smith's application at the crease. "It's not the first dismissal there's been off a no-ball and it won't be the last."

But those let-offs did not detract from Smith's latest batting clinic.

He faced 319 balls in total, including 24 fours and two sixes, in what was his third double century at this level, all made against England.

"I think you always need some luck when you score big runs," said Smith. "It fell my way today."

Smith was eventually out when he reverse-swept a leg-break from England captain and part-time spinner Joe Root to Denly, who had been at short third man.

Smith received good support from Australia captain Tim Paine in a sixth-wicket partnership of 145.

Fast bowler Mitchell Starc, in his first match of the series, then showcased his proven batting talent with a blistering 54 not out off 58 balls, including seven fours and two sixes, before Paine closed the innings.

"I thought Tim played exceptionally well today," said Smith. "And then Starcy as well came out and did the same. He hit the middle of the bat a lot, played some beautiful straight drives in the air and along the ground."

Australia resumed on 170-3 under sunny skies after Wednesday's rain-marred first day and Smith drove Archer through extra cover for a superb back-foot four in the second over to go to 65.

The next delivery, however, saw Smith hammer a full toss straight back at Archer, who dropped the caught-and-bowled chance, with the ball going for four.

England also gave Paine a 'life' when he edged Stuart Broad on nine only for Roy to drop a second-slip catch he should have held.

England took the new ball as soon as they could but that did not prevent Smith cover-driving Broad for a majestic back-foot four.

Wicketkeeper Paine, dropped on 49, fell to the first ball after tea when caught behind off Overton.

But there was no stopping Smith, who twice drove Leach for six.