UNITED 1 (McSheffrey 54), WALSALL 2 (Mattis 46, McDonald 81)
United: Ankergren, Crowe, Bromby, Naylor, Lowry, Snodgrass (Gradel 60), Kilkenny (Howson 75), Johnson, McSheffrey, Beckford, Becchio (Grella 60). Subs: A Martin, Doyle, Michalik, White.
Walsall: Ince, Vincent, Taundry, McDonald, Westlake, Richards, Till, Mattis, Gray, Nicholls, Deeney. Subs: Sansara, Hughes, Smith, Bradley, O'Keefe, Gilmartin, Grigg.
Referee: J Singh
Booking: Beckford (Leeds), McDonald (Walsall)
Att: 18,941
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Leeds United manager Simon Grayson welcomed leading scorer Jermaine Beckford back to the starting line-up after injury as his side looked to close the gap on League One leaders Norwich City.
United started the game on the front foot and enjoyed pretty much all the possession during the opening 10 minutes, forcing Walsall deep into their own half until the visitors won a corner in the 11th minute.
United responded by winning a couple of corners, but there was little to excite the crowd untilJason Crowe headed wide on the 20-minute mark.
Bradley Johnson forced Clayton Ince into making the first save of the game on the half-hour with a well struck shot and, moments later, the Walsall goalkeeper cut out Gary McSheffrey at the near post.
But there was little else in the way of chances as the game edged towards the half-time break.
Amazingly, after such an uneventful first half, the visitors took the lead within 45 seconds of the restart. Julian Gray latched on to a long ball forward, crossed from the left, and Dwayne Mattis was on hand to slam the ball home.
United were level within nine minutes, though, courtesy of a superb individual effort from McSheffrey. On the left flank and at distance, the loan man spotted Walsall keeper Ince straying in his area and he delivered an inch-perfect chip shot inside of the near post to make it 1-1.
Moments later, Ince got down well to save a Luciano Becchio header following a McSheffrey free-kick.
That was Becchio's last taste of the action with Grayson making a double change on the hour, Mike Grella and Max Gradel coming off the bench.
Grella was immediately involved when Beckford sent a powerful cross across the face of goal, but no one could get the decisive touch.
Leeds were starting to get on top and create openings and McSheffrey threatened again down the left, but his lifted ball into the box landed on the roof of the net.
Crowe also lifted a cross over the top after advantage was played following a foul on the edge of the box on Gradel.
As the game headed towards the final 10 minutes, Gradel's trickery forced another save out of Ince and that was the prompt for the Kop to pick things up vocally as United sought a winning goal.
But it was Walsall who got their noses back in front on 81 minutes in controversial fashion. Casper Ankergren clawed away a Clayton McDonald effort on the line, but the assistant referee flagged for a goal. TV pictures were inconclusive, but there was cerrtainly no clear indication that the ball had crossed the line.
It was the most controversial 'goal' seen at Elland Road in many year - efforts have been ruled where there is clear doubt - but it proved to be the deciding factor in a contest which saw Grayson's men lose their first home league game since January 2009.