Mark McGhee's team were given a lifeline by the club's prodigy Robbie Keane, but his effort proved in vain.
Birmingham took over at the head of the division after defeating Stockport 2-0 at St Andrew's, Chris Marsden and Bryan Hughes scoring the goals.
Andy Goram, who has joined Sheffield United on a two-month contract, helped his latest club to a 3-2 home win over Grimsby.
Huddersfield's Marcus Stewart opened the scoring after 21 minutes against Watford and Wayne Allison added another four minutes before half-time for a 2-0 win.
Chris Morgan received a second yellow card and his marching orders in Barnsley's 3-1 defeat at home to Norwich.
The Crystal Palace striker Matt Jansen eased Terry Venables' worries when he scored at Crewe for a 1-0 victory.
In the Second Division, Manchester City were again unconvincing in the 2-1 home win against Bournemouth. Danny Alsop and Paul Dickov scored for Joe Royle's men.
Gillingham's Paul Smith scored a second-minute penalty against Northampton but Roy Hunter, Carlo Corrazzin and Duncan Spedding sealed a 3-2 win for the visitors.Reuse content