Much of the loss is down to the success of upstart US invader K'Nex, which has seen its stake in the pounds 90m-plus market jump to 16 per cent from just 10 per cent at Christmas.
Last week, K'Nex won the best construction toy category of the Good Toy Awards, sponsored by BBC Enterprises. This Saturday, it launches a 10- week exhibition at Manchester's Museum of Science and Industry, part of a pounds 1.5m advertising spend to counter Legoland's pulling power.
Last December, K'Nex opened the first new toy factory in Britain for years, a pounds 2.6m plant at Ashford in Kent, close to the Channel Tunnel.
Peter Brown, K'Nex international president, said the factory would turn out 2.5 million packs of K'Nex this year, many of them for export.
Lego reacted sniffily to the latest data from research firm NPD: "We stopped taking NPD monthly tracking data because it was not reliably representative," said Michael Moore, Lego's UK marketing manager.
"Our sales are up 10 per cent so far this year and Legoland is a roaring success, with over a third of the projected 1.4 million annual visitors going so far."
Theme park aside, Lego still outguns its rivals, including Meccano andRitvik, with a pounds 5m advertising spend.