Gary Naysmith bemoaned his side’s poor decision-making as they were condemned to, at best, a relegation play-off spot.
The 2-1 loss at Airdrie means the Methil men sit just a point above bottom placed Arbroath with two games left to play.
Goals from Caolan McAleer and Jim Lister wrapped up the win for the Diamonds with Steven Campbell netting the Fife goal.
Naysmith said defensive frailties cost his side.
He said: “In the second half, it’s criminal to lose a goal from our corner. At half-time we touched on the fact that they were trying to hit us on the break from our corners and then we’ve lost a goal from that.
“But credit to the lads, they rolled up their sleeves and got the equaliser. For the next 10 minutes I thought we were the only team that was going to go on and win it.
“But for their second goal, it looks like a couple of our defenders step up and leave one defender in and of course he leaves Jim Lister onside. That sort of decision-making has cost us.”
To their credit, despite how much was at stake, both sides played some good football during the opening stages as the game flowed from end to end.
The home side created the best of the early chances and East Fife struggled to get going. The visitors gradually managed to get a foothold in the game and were unlucky on a couple of occasions not to break the deadlock.
Scott Durie thought he had opened the scoring when he fired home, only to see the assistant referee’s flag raised for offside.
The home side took the lead shortly after the re-start when McAleer burst down the wing before cutting in and firing past Greg Paterson.
East Fife went for broke, knowing that they had to leave the Excelsior with at least a point to keep their hopes of staying up alive.
Austin was the livelier of the two East Fife strikers and only the legs of keeper Grant Adam stopped him pulling the Methil men level.
It wasn’t long, however, before East Fife did get their equaliser and it came from the head of centre-half Campbell, who rose highest to nod in a Stephen Hughes corner.
With East Fife pressing forward in search of the winner, they were leaving gaps at the back and Airdrie took full advantage.
Lister, who had been a constant pest all afternoon, worked space for himself inside the box and crashed an effort well beyond Paterson.