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Welling suffered their first Blue Square Bet South defeat in seven matches after a rollercoaster at Sutton on Saturday.
The Wings twice trailed before hitting back to lead 3-2 but then conceded two goals in quick succession.
Welling were without Jack Obersteller (ankle) so on-loan Gillingham defender Jack Evans played left-back and Andy Sambrook return from injury at right-back.
Tom Kavanagh put Sutton ahead on 12 minutes but Andy Pugh equalised within a minute by scoring his 19th goal of the season.
Harry Beautyman restored Sutton's advantage on 16 minutes after more lapse Welling defending but the Wings were on level terms once again when Luis Cumbers scored.
Cumbers then took his tally for the season to four with his second goal of the game 17 minutes from time to put Welling ahead for the first time but, within a minute, Sam Page brought Sutton level and then three minutes later Watkins gave Sutton the lead.
The Wings remain second but have dropped a further point behind leaders Woking, who were held at Thurrock.
Bromley slipped to within two points of the relegation places after losing 2-1 at Farnborough.
Orlando Smith put Bromley ahead just past the half-hour but Douglas Bergqvist levelled before the break.
A late penalty from Reece Connolly ended any hopes the Lilywhites had of taking something from the game ahead of their festive double-header with Tonbridge.