Brett Rumford carded a 70 to finish one shot back at 9-under-par 207. James Kingston followed at 8-under-par 208.
Lonard carried a two-shot lead into the weekend and was in top form early on the front nine with a pair of birdies over his first six holes. The veteran Australian found trouble at the seventh, however, and walked away with a triple bogey at the par-3.
'Yesterday I said I needed to play the par-3s well and I don't suppose a triple bogey is in that sort of category,' he said.
His problems continued with a bogey at the very next hole and the 2003 Presidents Cup member soon found himself clawing back into position on the inward half.
Lonard began his recovery with a birdie at the par-4 13th and hit his approach inside 20 feet at the par-4 16th. The 37-year-old drained the birdie putt to maintain a slim lead over his fellow countryman Rumford.
'When I started playing again in 1997, I wanted to win in Australia which I accomplished in 1997 and my next aim was to win in Europe and the other main Tours in the world - Europe, America and Japan,' said Lonard. 'If I can win tomorrow I would be one closer to the goal I set myself at the start. And hopefully winning breeds winning and I can move on to another level.'
Rumford, almost exactly 10 years younger than Lonard, has already won on the European Tour. The Australian titled at last year's Aa St. Omer Open and a victory on Sunday would further solidify his status on tour.
The 26-year-old stumbled out of the gate with a birdie at the first, but he hit his third shot to the par-5 third within a foot of the hole. Rumford tapped in for birdie and added a birdie at the 11th to reach minus-8.
Rumford then collected a birdie of his own at the 16th.
'It was a tough day today,' said Rumford. 'You have to grind it out over the whole 18 holes.'
Kingston, another veteran with multiple wins worldwide who is in search of his first European Tour crown, tallied two birdies to go along with three bogeys on the front nine to make the turn at 7 under.
The South African added birdies at 11 and 13 to grab a share of the lead, but faltered with a bogey at the 16th to finish two off the lead after a round of 72.
The hope for an Irish winner lies in Paul McGinley, who fired a 66 to move into a tie for 10th with Nick O'Hern, Terry Price, Julien Clement, Paul Broadhurst and David Carter at 6-under-par 210.
Irishman Padraig Harrington was one shot further back at 5-under-par 211 along with Miguel Angel Jimenez, Raphael Jacquelin, Steve Webster, Andrew Oldcorn, Stephen Gallacher, Peter Baker, Roger Chapman and Peter Fowler.