Davies, who led on eight under par and by four shots after 36 holes, now leads on three under, just two shots clear of Australias Rachel Teske who showed resilience by becoming only the third player of the day to break par with a 71 as the rain poured without a break from 10am through to the close of play at nearly 7pm.
With just two players under par in the field, Sophie Sandolo from Italy is the best of the rest after matching Davies 77 and at 1-over par is not out of contention for her maiden Ladies European Tour title.
Davies started solidly in heavy rain, carding four pars before swapping a bogey with a birdie at the fifth and sixth holes. Another shot went at the ninth, but she was still four clear of Sandolo.
But the damage came after the return from an hour and twenty minute suspension of play with a bogey at the 13th and a double bogey at the 15th. It got worse at the final hole when she failed to get up and down from short of the green to save par.
Miserable, said Davies who is in the hunt for her 66th title around the globe. But a two shot lead is good right now. On another day, Rachel could have shot five or six under par. Ive hit only two bad shots all day and on another day, I could have been ten under!
Germanys Martina Eberl carded a creditable 72 and sits in fourth place on 2-over par alongside Australias Nadina Taylor who, playing with Davies and Sandolo, had a 76.
With heavy rain once again forecast for Sundays final round, it will be a battle of immense proportions against both the weather and the high quality and cosmopolitan leaderboard for the first prize and for Davies to claim her first Australian Open title.
The best score of the day went to big hitting Sophie Gustafson from Sweden who with a 2-under par 70, went from tied 80th and making the cut right on the 10-over par mark, to tied for 16th place.