The U's were left to rue what might have been as they were defeated 3-1 in the first East Anglian derby of the season.
The first half had gone to plan with a strong defensive display giving the U's a platform to take a 1-0 lead into the break thanks to a Clive Platt stormer.
However, Platt had missed a golden chance just before the break and then Mark Yeates missed a penalty midway through the second half.
Yeates' head was still in his hands when Town drew level at the other end, and the missed opportunties came back to haunt the U's as Town powered home with two further late goals.
For the first hour, it had seemed like things were going to go the U's way as they put in one of their best away displays of the season, but Town record a ninth consecutive home victory to edge closer to the top six places.
After the match, Jim Magilton admitted it was a 'smash and grab raid' by his side, whilst boss Geraint Williams was left to rue what he called a 'mad fifteen minutes'.
For that first three quarters of the game, the defence stood strong, but once again fell down late in the match as the home team took all three points.
With Karl Duguid still absent through injury, the U's made just the one change to the starting eleven. Matt Connolly, introduced as sub at the weekend, replaced the man he came on for on Saturday, Adam Virgo.
Town started on the front foot, with the U's left side the focus of their attentions in the early stages.
One early move saw Walters slide in Lee down the right hand side of the area and, as the big Town forward went to pull the trigger, Connolly was across quickly to charge down the effort.
The home team were just a yard sharper in the opening exchanges, and Jackson caught Wright with a late challenge on nine minutes when the full back helped the ball on just before the U's man's arrival.
The U's first forays into the Town box came just after the ten minute mark as first Lisbie was denied by a tackle from De Vos, then the same striker tried to feed in Yeates but overhit his pass.
Colchester's top scorer was the next to try and get in on goal, cutting in from the wing after a great diagonal ball, but he dragged his shot wide with a left footed effort.
Town then were twice left rueing crucial interceptions, but overall the visitors could be happy with how the first quarter of the match had shaped up.
In fact their first nervous moment did not arrive until the twenty-third minute when Counago cut across Baldwin and struck a shot that Davison spilled as it popped up in front of him. Balogh was on hand to clear up the danger.
At the other end, a long throw from the left was met by Platt at the near post and his little flick on tested Alexander, who had to help it over the bar.
From the resultant set piece, the U's players were left claiming a handball as Connolly met the corner with a header and saw his effort seemingly blocked by the upraised arm of Lee at the far post.
The incident was still in Colchester minds when Walters was sent away in acres of space down the right. He looked like he would get a shot in on goal, but Baldwin got across at speed and blocked the ball away to safety.
The U's then had Alexander scrambling across his line on 30 minutes, as Lisbie held off the attentions of the Town defence before striking only inches wide.
The Colchester fans, still rueing that miss, were sent into delirium sixty seconds later as they took the lead with a superb goal.
The ball was played into Platt by Jackson and he took a touch before lashing home a brilliant 25 yard drive which raced past Alexander and high into the net.
Town were right back on the offensive and a cross from the left found Harding crossing low into the box, but Baldwin was on hand to turn the ball over the bar before it reached Counago, who would have just had to slide home from close range.
The U's then hit the home team on the break and it looked like Lisbie might get away, before Harding did well to deny his man.
Colchester were defending manfully and could have doubled the lead themselves on 39 minutes.
A long ball down the left found Platt chasing the ball down as and Alexander came to meet him on the edge of the box, he lifted it over the Town keeper.
Having presented himself with a chance to shoot, he took his time as he picked himself a position but, manoeuvring it onto his stronger right foot, he eventually screwed it wide of the near post with a man on the line.
Harding's battle with Yeates saw the Town man go into the book on the stroke of half time, as he tracked across from the wing and brought the Colchester winger down.
The U's then had another great chance on the stroke of half time as the ball was fed back into the box from a corner and Granville couldn't quite generate enough power on the header to beat Alexander from close range.
The Town players went off to boos at the break, but were on the offensive straight from the restart, with Wright hooking over the bar from a corner.
However, the more the home team pushed on, the more the U's were able to attack and Lisbie was sent away five minutes after the restart to bear down on goal.
Faced by two Town defenders, he held it up and laid it to Jackson who, from a narrow angle, struck his shot into the near side netting.
The visitors were having to defend resolutely, but the home team were being restricted to long range shots, with Garvan's effort from distance being saved at the second time of asking by Davison.
However, the U's were having chances of their own against a shaky home defence.
First, Lisbie collected a loose ball and had his low shot turned over the bar by Wilnis and from the resultant set piece, Connolly saw his far post header blocked crucially by Alexander at his near post.
With the U's having the better of it, Town made their first change on the hour mark, introducing Danny Haynes for the ineffectual Billy Clarke.
The home side were attempting to find a way back into the game, and it looked like Lee might find the back of the net on 67 minutes. The ball sat up nicely on the edge of the box but he pulled his half volley just wide of the near post.
Town fans were still rueing that chance when the U's broke through at the other end.
Lisbie just escaped the offside trap and burst in on goal and went to ground as he went into the area under pressure from the keeper.
The home fans felt that the Colchester striker had taken a tumble and they felt redemption was theirs when Yeates, so deadly from set pieces so far this season, saw his penalty turned away by Alexander.
And that miss proved crucial when Town drew level on 72 minutes. Harding burst into the box and the ball was played across into the path of Walters, who slammed home with Lee standing in an offside position.
The goal stood and the game was now into full swing.
Lisbie then broke away again on 74 minutes and, with Izzet and Yeates in space outside of him, he opted to shoot, screwing his shot wide of the target.
Lisbie was escaping the Town defence at will and on a similar run on 76 minutes, he this time opted to lay it into the path of Platt, who was just denied a clean kick of the ball by the defence.
Both teams then made a change as the game entered its final stages. Liam Trotter came on for Walters, whilst Yeates came off for Teddy Sheringham.
Town were pushing on and, having twice been denied by Elokobi tackles, they took the lead with just nine minutes remaining as Trotter powered home from a corner.
And the job was completed for Town on 84 minutes when Trotter's fellow substitute Haynes nipped in for a cross at the near post to head home past the exposed Davison.
The home fans were in raptures and, although they had once again claimed that the U's had meant little to them, they were certainly were relishing their team being in front.
Haynes went close again on 88 minutes, lashing a shot only inches wide of the post.
The frustrations were too much for one Colchester fan, who ran onto the pitch to goad the home supporters, but his exploits were soon over as the stewards closed him down quickly.
The game had ended on a flat note for the U's, after things had looked so promising for the first hour - but they again gave Town plenty to think about
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