A 10-wicket haul from Nathan Lyon was not enough for the New South Wales Blues to overcome Victoria in a tense Marsh Sheffield Shield clash at the SCG.

A nerveless 38no from 18-year-old Jake Fraser-McGurk defied a rampant Lyon (10-78 for the match) and put on 52 for the sixth wicket with James Pattinson (16) to see the Vics chase down 141 in the final innings to seal victory before stumps on day three.

The visitors had slumped to 5-87 with Lyon taking the first four wickets but Fraser-McGurk lofted the tweaker for four over mid-on to seal the four-wicket win, finishing unbeaten in an 88-ball stay to get his side home in his just his third game.

Lyon, fresh off taking 6-21 in the first innings, claimed his maiden 10-wicket match haul for the Blues and reached 600 first-class wickets, exhibiting potent form in his first red-ball game after what he termed an emotional and exhausting end to Australia's Test series against India.

The Test tweaker had earlier scored 21 as the Blues' nightwatchman before Sean Abbott ensured the match continued to move along in frenetic fashion.

Abbott crashed six sixes during a quickfire 73 from 75 balls, including 23 runs from one Scott Boland over, to top score in the hosts' second innings and give the Shield ladder-leaders a shot at victory.

The Blues had resumed at 1-22 on Friday, but lost 5-18 and were all out for 175 at the end of an eventful morning session.

Will Sutherland had claimed the prized scalp of Steve Smith for 13, with the batsman struggling to hide his disbelief after being judged to have edged the teasing delivery.

Smith, who earlier survived a wholehearted lbw shout from Boland, barely stopped shaking his head as he trudged off.

The superstar's dismissal came the morning after his Indian Premier League pay was trimmed by approximately $2 million, having been picked up by Ricky Ponting's Delhi Capitals for $400,000 in the auction.

Former Test players Kurtis Patterson and Peter Nevill were both out for ducks during the NSW collapse, while Moises Henriques scored three.

Abbott, whose half-century came in just 77 minutes, Mitchell Starc (13) and Trent Copeland (20) dragged their side past 100, which looked highly unlikely when NSW were 7-68.

Hazlewood (0) faced just five deliveries in an entertaining final-wicket stand of 56 runs.

As Victoria came in to bat, Lyon shared the new ball with Mitchell Starc, who dismissed Pattinson late in the day for his first wicket in nearly 40 first-class overs.

Lyon’s first delivery was smashed into the stands by Nic Maddinson, but the spinner settled and created the all-important first breakthrough when Marcus Harris (14) was caught behind in the eighth over.

Henriques dropped a leg-slip catch offered by Matt Short as Lyon continued to build pressure, removing Peter Handscomb (4), Short (17) and then Maddinson (44) as Victoria slipped to 4-84.

Josh Hazlewood ensured Seb Gotch's stint at the crease was brief, trapping him lbw on two to fuel NSW's hopes of victory.

But from there Fraser-McGurk found a reliable partner in Pattinson, and together they took their team to within a whisker of the win before Pattinson was knocked over by his sometimes-Test-teammate Starc, albeit too late to impact the outcome of an entertaining low-scoring affair.