Their table-topping hopes are still high, but after holding the lead with four heats to go at Alwalton they were undone by veterans Hans Andersen and Chris Harris in the closing stages.
The visitors initially went behind to a Panthers 5-1 in Heat 3 which was headed by Scott Nicholls, whilst Michael Palm Toft re-passed Nick Morris for second place.
But Wolves quickly dug in with reserve Leon Flint nearly taking the double scalp of Andersen and Harris in Heat 4 before Andersen forced his way through.
And after Broc Nicol won Heat 5 with Sam Masters stopping for a second time, the visitors cut the gap to two points with a good ride by Morris to defeat Harris in Heat 7 whilst Luke Becker supplied third spot. Flint then went one step further by holding off Andersen throughout Heat 8 for another win to underline his rapid progress.
And the Monmore men turned things around completely when Morris and Luke Becker gated swiftly for a big Heat 10 5-1 as they inflicted the first defeat of the night on Panthers guest Danny King.
Wolves held their lead for one more race but they were overturned by a brutally strong move by Andersen in Heat 12 as he forced Ryan Douglas wide on turn four to create a gap for team-mate Palm Toft to follow him through. Boss Peter Adams replaced skipper Rory Schlein with Douglas in Heat 13, but Harris stormed through on the first lap just when Wolves appeared to have gated on a 5-1. Peterborough held a match-winning position in Heat 14 but Becker battled on to pass Scott Nicholls to give Wolves the chance of taking something from the meeting. But another strong move from Andersen saw him come through at the expense of Morris, with Harris also surging around the outside to send the home fans away happy.
PETERBOROUGH 49: Hans Andersen 16, Chris Harris 10+1, Scott Nicholls 9, Danny King 7, Michael Palm Toft 5+3, Bjarne Pedersen 2+1, Jordan Palin 0.
WOLVERHAMPTON 41: Ryan Douglas 9, Nick Morris 8+1, Broc Nicol 6+1, Leon Flint 6, Luke Becker 6, Rory Schlein 3+3, Sam Masters 3+1.