Karrie Webb and Lydia Ko in contention for Australian Open title

Karrie Webb is relishing the chance to challenge for her sixth ISPS Handa Women's Australian Open title after she moved within a shot of the lead on the third day.

Webb continued to delight her home fans at The Grange near Adelaide as she battled her way to a two-under 70 that featured three birdies, just one bogey and a clutch par save at the last after her pitch rolled several feet beyond the cup.

The 41-year-old read the putt perfectly and allowed herself an expansive celebration as she remained on eight under par alongside Lydia Ko, who had earlier made a significant move up the leaderboard with a four-under 68 which included birdies at each of the opening four holes.

After watching Webb hole out at the last, world No 1 and defending champion Ko told ABC Television:  "That's why she's a legend", while the home favourite described her finish as "a huge momentum putt" to take into the final day.

Webb and Ko are one shot off the lead shared by South Korean Jenny Shin (70), Japan's Haru Nomura (70) and American Danielle Kang, who made five birdies in a flawless 67 - the joint low round on Saturday.

"I'm not sure my name means the same on a leaderboard as perhaps it did a little while ago, but I think most people respect the fact that I know how to win," said Webb, who won the first of her five national titles 16 years ago.

"If I'm up there with a few holes to go I probably might have a good crack at it. It's been quite a while since I gave myself a chance to win on Sunday and a legitimate chance, so I'm looking forward to the opportunity.''

Ko added: "It's going to be fun, I'll try to enjoy it, obviously in the final groups there might be a bit more tension, but I'm going to try and enjoy it. All the girls are lovely; it's not like there's going to be sparks going on!''

Catriona Matthew had earned a share of the halfway lead which prompted Jack Nicklaus to send her a message of support on Friday, but the veteran Scot struggled down the stretch as she carded a 73 which left her two behind the leading trio.

The 1996 champion moved to 10 under when she rolled in her third birdie putt of the day at the 10th before dropping shots at three of the next five holes, but the 46-year-old insisted afterwards: "At least I have not played myself out of it."

But it was a poor day for Matthew's playing partner and overnight co-leader Holly Clyburn, whose card was littered with five bogeys and a double-bogey at the 13th as she returned a six-over 78 which saw her plummet 29 places down the leaderboard.

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Charley Hull has an outside chance of contending from five shots off the pace after she offset three birdies with as many bogeys in a disappointing 72, while her English compatriot Jodi Ewart Shadoff is one shot better after she birdied three of the last four holes to cap a faultless 67.