Town were frozen out at a wintry Portman Road as goals from Jay Demerit and Bruce Dyer gave Watford the points, Tommy Miller on target for Blues from the penalty spot.

American Demerit scored with the Hornets' first effort at goal on the stroke of half-time with Dyer left unmarked to head home on 80 minutes.

Miller reduced the arrears with his fourth penalty of the season five minutes later to set up a grandstand finish but one that ended in a first defeat in nine games for Blues.

Darren Currie dropped to the bench as Jim Magilton returned to the starting line-up and the Town skipper was instrumental in the first opening of the match, feeding Darren Bent whose cross went narrowly wide of the far post.

Miller tested Paul Jones with a low drive on seven minutes, the Watford 'keeper saving at the second attempt as James Scowcroft challenged.

Scowcroft almost got on the end of a Fabian Wilnis cross then Bent rattled a shot at Jones after Miller's pass had split the visitors' defence as Town created the better openings in a disappointing first-half.

Miller then fired wide from eight yards with the midfielder having his own personal duel with Jones, warming the 'keeper's hands with another 18 yard drive.

Watford, with Danny Webber looking sharp in attack, threatened occasionally on the break, Richard Naylor blocking a Hameur Bouazza cross as the former Manchester United striker almost got in at the near post.

The Hornets made the breakthrough on 45 minutes, Demerit beating Naylor and Scowcroft in the air to head Neil Cox's cross into the far corner.

Town should have been level three minutes into the second-half, his speed taking him in on goal but he guided the ball despairing wide.

Currie replaced Ian Westlake on 56 minutes and was immediately in the action, his cross frantically cleared by Cox.

Bent's pace was proving a problem for the Hornets' defence and another right wing burst from the England U21 international took him into the box, Demerit and Gavin Mahon combining to belt the ball to safety.

Bent fired wide with his left foot after a long ball from the back and then volleyed over with his right foot as Town continued to search for an equaliser.

In a rare Watford break, Johnnie Jackson volleyed just wide from a left wing cross, then Chris Eagles almost set Webber in on goal.

With the game slipping away, Dean Bowditch replaced Wilnis as Town went three at the back, the teenager firing over with his first touch of the ball.

Town were two down though seconds later. Dyer, just on as substitute for Webber, was left free to head in Jackson's corner.

Bowditch fired just over the bar after a twisting run, Bent had a header tipped over then David Unsworth diverted the ball over the bar from four yards.

Then Bent lifted the ball over the advancing Jones only to see it bounce back off the bar and cleared by Cox as Blues' luck deserted them.

With five minutes left on the clock Town got a lifeline, Cox adjudged to have handled in the box and Miller doing the rest from the penalty spot.

The goal sent up a frantic finale, Bowditch smothered out inside the Watford box, Scowcroft almost getting on the end of a Horlock cross then Currie's shot touched around the post by Jones.

But Watford held on to ease their relegation worries and inflict a second home defeat of the season on Blues in the Championship.

Town line up: Davis, Wilnis (Bowditch 78), De Vos, Naylor, Unsworth, Miller, Magilton, Westlake (Currie 56), Horlock, Bent, Scowcroft. Subs not used: Price, Richards, Karbassiyoon.