Darren Huckerby was the hero for The Canaries, volleying home from ten yards for the decisive goal after just 16 minutes.
Second-placed West Brom lost ground after a thumping 3-0 reverse at Preston.
The Baggies were second best throughout and trailed just after the half hour mark when Eddie Lewis fired home into the roof of the net from long range.
David Healy (78) and Graham Alexander (87, penalty) then made the game safe with late strikes to maintain North End's promotion push.
West Ham moved into the play-off spots after coming from behind at Bradford to record a 2-1 victory.
Peter Atherton (35) gave the hosts a first-half lead, but debutant Bobby Zamora immediately endeared himself to West Ham fans by heading an equaliser just past the hour mark.
Marlon Harewood then pounced for the winner with 11 minutes left to increase City's woes at the bottom.
Sunderland staged a late comeback to grab an unlikely point from their trip to Vicarage Road.
Gavin Mahon (7), with his first league goal for the club, and Neil Cox (68) from the penalty spot had given Watford a two-goal lead, but Marcus Stewart reduced the arrears with a quarter of an hour left and Darren Byfield then levelled matters on his debut three minutes from time.
Crystal Palace's fantastic recent form continued with a comprehensive 3-0 win at promotion-chasing Sheffield United.
Iain Dowie's men claimed their fifth successive win, and also their fifth consecutive away triumph, to further raise hopes of a play-off push.
Top scorer Andy Johnson opened the scoring with his 21st goal of the season on 42 minutes.
Tony Popovic then took advantage of some poor defending to double the lead, and Neil Shipperley added a third shortly before the final whistle.
Rotherham dealt Reading's play-off hopes a severe blow with a 5-1 mauling at Millmoor.
The visitors actually took the lead through former Rotherham star Shaun Goater; the Bermudan converting from the penalty spot after Lloyd Owusu had been impeded.
But debutant Michael Proctor levelled with another penalty just four minutes later, and Andy Monkhouse ensured the hosts went in ahead at the break with a great strike from the edge of the box.
Martin Butler extended the lead from close range on 47 minutes against his old club, and late efforts from Proctor and Richie Barker put a gloss on the scoreline.
Stoke took a point from their visit to Millwall, Clive Clarke gave the visitors the perfect start with just four minutes on the clock but Daniele Dichio netted his fifth goal in three games with a powerful header to ensure a share of the spoils.
Steven Foster's late goal earned Crewe a 1-1 draw at Walsall after Jorge Leitao had headed the hosts ahead in the first half from Simon Osborn's cross.
Burnley eased their relegation worries with a 1-0 home win over Gillingham thanks to a late Glen Little goal, but Nottingham Forest remain rooted in the bottom three after a home defeat to Coventry by the same scoreline, with Patrick Suffo netting the only goal after four minutes.
