Shane Warne admits Australia will feel the loss of Brett Lee but is still backing them to retain the Ashes.

Lee has been ruled out of the first Test in Cardiff, which begins on Wednesday, with a torn rib muscle and is also a major doubt for the second match of the series at Lord's.

"It's a big blow for Australia. He was in my starting XI. Him and Mitchell Johnson with the new ball was quite exciting," he said.

He added: "At 90mph-plus, with both swinging the ball, it was an exciting prospect for Australia.

"Brett had waited a long time to get back after being injured. But Australia are lucky because they have Stuart Clarke and Ben Hilfenhaus.

"They have good back-up but it's a shame because Brett was starting to find some form."

Warne believes Australia start the Ashes series as favourites after successfully emerging from a difficult spell.

"Australia have been through a transitional period and have found some new players who have picked up some Test experience," he said.

"Beating South Africa in South Africa is not that easy to do so for that group the transitional period is over. I think they'll do exceptionally well over here. Both sides' batting will be okay, the issues will be their starting XI and how to take 20 wickets.

"There's not much to choose between them but if you had to put your house on someone you'd have to say Australia."