Town's Premiership status looks more and more perilous after a 3-1 loss at Upton Park. Despite periods of Town pressure a Di Canio inspired West Ham had the better chances and more importantly took them.
George Burley chose to risk Sixto Peralta, although whether this will be considered a good decision in hindsight remains to be seen. The Argentinian was replaced, possibly injured, just after half-time. The Inter man started in the centre of midfield but towards the end of the half swapped with Wright, moving to the right flank.
Elsewhere Fabian Wilnis replaced Chris Makin as expected while elsewhere it was as Town lined-up against Villa last week.
The first excitement came in the second minute when Di Canio fell to the ground in the area under pressure from Hreidarsson. Despite his appeals referee Wiley was not impressed.
There was a scare for Town in the eighth minute when Fabian Wilnis scuffed a Schemmel cross just past Sereni's post. Both looked relieved and the corner came to nothing.
Marcus Stewart had Town's first real opportunity. His tenth minute shot flew just wide after Marcus Bent had headed a Hreidarsson long ball to Wright who had teed up the ex-Bristol Rovers man.
On 13 Di Canio was again on the ground in the area and again referee Wiley was unimpressed.
West Ham were having the best of the opening stages with Hreidarsson doing well to stop Kanoute as he broke forward on to a Cole ball. The home side were breaking fast and defending deeply.
Mark Venus hit a freekick well wide on 21 after Marcus Bent had been fouled. Town were having a lot of trouble with West Ham breaking, and particularly Di Canio, but Town had had periods of possession without really creating clearcut chances.
It was Di Canio who was to create West Ham's first goal in the 36th minute. The Italian crossed from the right to the near post where Steve Lomas met it with his head while completely unmarked. It was a poor goal to concede and just what Town didn't need.
Sereni made a good save on 40 as Cole hit a shot from a Schemmel ball back across the area. The Frenchman had seized on a loose ball from Wright inside the area. The keeper was in action again before the break as Di Canio hit a scissor kick straight at him.
Quickly afterwards Di Canio sent a ball low across the face of the area but ahead of Kanoute who was stopped getting the returned ball by McGreal.
Town's best chances in the latter stages of the half fell to Stewart who hit a shot just over the bar from a Holland cross and Clapham who put a freekick off the wall and wide.
The break saw Jermaine Wright replaced by Tommy Miller. Wright had been struggling with an injury before the game, but hadn't had one of his better games.
Sixto Peralta picked up on a loose James clearance on 47 and played the ball forward to Bent. His cross towards Stewart saw last year's top scorer and Miller both have efforts charged down by the staunch West Ham defence.
Town had an escape on 48 when Kanoute blazed a shot over the bar after Sereni had failed to get to a Di Canio cross. It was a bad miss on an afternoon when Kanoute hardly impressed in front of goal.
Sixto Peralta was replaced with Finidi George on 53. The Argentinian looked tired and may have been injured, although his replacement saw an angry reaction from some Town supporters with boos ringing round the Centenary Stand.
Just before the hour Sereni was in action again, saving two efforts from Schemmel. The Frenchman's first shot was tipped out for a corner which was cleared and again fell to him. This time Sereni held on.
Marcus Bent took the ball down the right and into the box on 61. He hit his shot towards James's near post but the West Ham keeper got down to it well. A minute later Matt Holland headed over as Town got on top.
Kanoute again showed his profligacy in the 62nd minute. He was played in after McGreal had lost possession, but allowed Venus to get back and dispossess him before spending several minutes on the ground, stopping play.
On 70 Lomas was again unmarked and sent a header from a corner into the danger area. Town eventually scrambled the ball away for a corner.
Tommy Miller picked up a yellow card for a foul on Cole. The Town sub can consider himself unlucky as it was his first foul while Cole in particularly had avoided going in the ref's book despite a couple of late challenges on Fabian Wilnis in the first half.
A minute later Town were on terms. The ball broke to Finidi George down the left inside the West Ham area. He slipped the ball across the area where Stewart and Miller had shots charged away. Fortunately for Town Marcus Bent was following up and hit it low into the corner of James's net. Town were back on terms and deservedly so after an improved second half.
Town were not to stay on terms for long though. Paolo Di Canio hit a shot from distance which Matteo Sereni parried away. No Town defender seized on the ball and the Italian was allowed a second go at it and this time he made no mistake.
It was a big blow for Town and a poor piece of defending. Stewart tried to hit back on 77 and sent a shot goalward but straight at James.
Marcus Bent picked up a yellow card shortly afterwards for dissent. Town had been on the end of a number of poor decisions not least when Fabian Wilnis was clearly tripped by Sinclair just outside the West Ham area in the latter stages and no foul was given. The striker was clearly frustrated and had also had a long-running spat with Repka throughout the afternoon and both were spoken to by referee Wiley a few times,
Town pushed forward as time began to run out, but as so often this season the Blues were hit by a sucker punch. Sub Defoe, on for Kanoute, ran at the Town defence on the edge of the area. As with Chris Marsden and Damien Duff recently the defence sat off the advancing player and the England U21 hit a shot past Sereni into the net.
A number of Town fans left with another defeat now looking inevitable. A Matt Holland header and a flicked effort from Finidi were the final Town chances of the game, but it was not enough.
Another poor result for the Blues and on an afternoon when Bolton picked up another win and Fulham gained a point. Town's position looks very precarious with points on Monday now a must.