Monty Panesar has challenged England's batsmen to complete a record-breaking victory in the second Test after inspiring a stunning fightback against New Zealand at Old Trafford.

The Northamptonshire left-arm spinner claimed Test-best figures of six for 37 to dismiss New Zealand for a lowly 114 after they looked on course to secure victory having engineered a potentially decisive 179-run first-innings lead.

Panesar's superb display left England chasing a victory target of 294, which would eclipse the previous best successful fourth innings run chase at the ground of 231 for three recorded against West Indies in 2004.

They will resume this morning needing a further 218 for victory after reaching 76 for one.

And having played his part in England's amazing recovery, Panesar believes it is time for the batsmen to perform after they delivered another insipid display on Sunday morning to be dismissed for a lowly 202.

"We've set ourselves a good platform and hopefully we can build on that," said Panesar.

"It's a tough pitch to bat on, but with the batting line-up that we have, hopefully we can knock these runs off."

Panesar has singled out fellow left-arm spinner Daniel Vettori, who claimed another five-wicket haul as England lost six wickets for only 42 runs, as the biggest threat.

But he has taken confidence in the assured manner England played Vettori last night before he struck six overs before the close to dismiss Alastair Cook.

"Vettori will probably have a big impact but if we can play him well like we did last night then hopefully we can knock off the runs and win the Test," said Panesar.

"For us to turn it around and end on a positive note was a good sign for us. We knew we had to bowl them out yesterday if we were going to be in this game."

But the tourists remain equally confident having witnessed England's dismal attempts to conquer the conditions earlier in the day.

Seamer Iain O'Brien believes they are favourites, stressing: "Sixteen wickets fell yesterday and we need to wrap nine more so, at the moment, we're certainly in front.

"Our initial goal was to get a lead of anything over 300 and we weren't too fazed with what we got so we were pretty happy being nearly 300.

"No team has scored more than 230-odd to win here and on that deck it's going to be a hell of a chase if they get it, but I personally think we'll come out all right."

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