ALBION were replaced in second spot by an impressive Forest side who extended their unbeaten run to 18 games.
Billy Davies' team deservedly went in 1-0 up at the break thanks to Dexter Blackstock's 18th-minute strike.
And two fine finishes from Radoslaw Majewski and Chris Cohen in the 53rd and 55th minutes respectively put Forest firmly in control.
Sub Roman Bednar pulled one back on 65 with his first goal at The Hawthorns this term - to spark a late Albion rally.
But Forest defended stoutly to see the game out.
Albion managed to beat the freeze and get the game on thanks to the club's hard-working ground and maintenance staff, setting up a showdown between the second-and-third-placed clubs in sub-zero temperatures.
New loan signing Gabriel Tamas was handed an immediate debut as Roberto Di Matteo made five changes to the FA Cup win at Huddersfield six days ago.
Gianni Zuiverloon, Joe Mattock, Luke Moore and Jerome Thomas also came in as Shelton Martis, Marek Cech, Bednar, Youssouf Mulumbu and Filipe Teixeira made way.
The Baggies were also buoyed by the surprise return of Ishmael Miller to the bench after a 13-month knee injury lay-off.
Davies made three changes with Nicky Shorey, Kelvin Wilson and Guy Moussi replacing James Perch, Luke Chambers and Robert Earnshaw.
Ex-Baggies striker 'Earnie' was named as a sub but had to withdraw just 15 minutes before kick-off after suffering an injury during the warm-up.
Albion did their best to warm up the home hordes who had braved the cold by threatening twice during the opening ten minutes.
A terrific counter-attack involving Gonzalo Jara, Thomas and Moore set up a shooting chance for Graham Dorrans 20 yards out, but the in-form midfielder screwed his shot wide.
Tenacious play by Simon Cox to dispossess Chris Gunter then gave Thomas a chance to run at the Forest defence and only a last-ditch block by Wilson prevented the winger from testing Lee Camp.
Forest didn't record an effort at goal until the 15th minute when Cohen pounced on a weak Albion clearance, only to fire well wide from 20 yards.
Then, completely out of the blue, the visitors snatched the lead on 17.
Referee Lee Probert angered the home hordes by awarding Forest a corner after a tangle between Jonas Olsson and Blackstock - and you can guess what happened next.
Majewski swung in the flag-kick and Blackstock stuck out a boot to divert the ball in off the post from 12 yards.
Albion immediately put Forest on the back foot and Thomas had Camp grasping at thin air with a gorgeous effort from the edge of the box which curled just wide of the far post.
Moments later, Camp had to rush off his line and dive bravely at Cox's feet to prevent the ex-Swindon striker converting strike-partner Moore's sublime throughball.
Back came Forest and Gunter outstripped Mattock down the right before pulling the ball back for Majewski, who fired well over from 15 yards.
However, goalmouth action was at a premium and, apart from a vital Carson punch which prevented Wes Morgan getting on the end of Majewski's free-kick, the rest of the half proved a non-event.
The half-time interval couldn't come quickly enough for the Baggies who had failed to find any rhythm against Davies' well-drilled unit.
Di Matteo ran a change at the break, replacing Moore with Bednar - but Albion had a mountain to climb just eight minutes into the second half.
The hosts failed to clear their lines properly and Majewski beat Carson all ends up with a stunning 15-yard volley from Cohen's cross which bounced in off the underside of the bar.
Albion were being well beaten - and it was 3-0 on 55.
Guy Moussi played the ball into Cohen's path 20 yards out and the midfielder gave Carson no chance with a left-foot shot which flew in off the far post.
Forest were fortunate to keep ten men on the field in the 58th minute when skipper Paul McKenna slid in with his studs up and caught Zuiverloon on the shin - but referee Probert only brandished a yellow card.
Albion looked dead and buried but managed to find a lifeline in the 65th minute when Dorrans set up Bednar with a stunning crossfield ball and the striker made no mistake, slipping the ball past Camp from 12 yards.
Moments later, the Baggies appeared to get a huge slice of luck when Thomas felled Paul Anderson in the box - but Probert waved away the Forest midfielder's protests.
But Albion now had the bit between their teeth and Camp had to dive full stretch to his left to push away Olsson's downward header from Dorrans' flighted ball into the box.
Sub Robert Koren was next to try his luck with a 20-yard effort which fizzed wide of the left-hand post.
Sub Miller almost made a fairytale comeback when, in the 88th minute, he saw a left-foot screamer superbly tipped over by Camp at his near post.
ALBION (4-4-2): Carson; Zuiverloon, Tamas, Olsson, Mattock (Koren 65); Brunt, Jara, Dorrans, Thomas; Cox (Miller 77), Moore (Bednar HT). Subs not used: Kiely (gk), Cech, Martis, Mulumbu.
FOREST (4-5-1): Camp; Gunter, Morgan, Wilson, Shorey; Cohen, Anderson, McKenna, Moussi (Tyson 61), Majewski (Perch 78); Blackstock (Adebola 75). Subs not used: Smith (gk), Chambers, McGugan, McGoldrick.
GOALS: ALBION - Bednar (65. FOREST - Blackstock (18), Majewski (53), Cohen (55).
BOOKINGS: ALBION - Mattock (foul 28), Tamas (foul 43). FOREST - McKenna (foul 58), Blackstock (foul 69).
REFEREE: L Probert (Gloucestershire).
ALBION STARMAN: Graham Dorrans.