The Magpies let Arsenal off the hook when they squandered a first-half penalty at St James' Park last night, and ultimately paid the price when the Gunners ran out 3-1 winners to plunge their hosts deep into trouble.
Defeat left the Tyneside club inside the Premier League drop zone and two points adrift of safety with just eight games remaining, and with title-chasing Chelsea their next opponents, their prospects look bleak.
However, for an hour, they matched the Gunners before eventually succumbing after losing defenders Sebastien Bassong and Steven Taylor to injury.
Midfielder Nolan, who joined the club from Bolton in January, saw enough in that opening 60 minutes to suggest salvation remains in their own hands, but only if they develop a killer instinct.
He said: "It's down to us now to start being ruthless, ruthless with each other and against teams.
"But the lads are up for the fight and certainly, I believe we have got enough in the changing room and I don't believe we will go down.
"Even though we are in a sticky situation at the moment, I am 100 per cent positive that we will still be in the Premier League come the end of the season."
Caretaker boss Chris Hughton also attempted to accentuate the positives in the immediate aftermath of a game which promised so much, but still ended in crushing disappointment.
However, he was left to rue two key decisions which proved costly.
He left skipper Michael Owen sitting on the bench as the 29-year-old struggles to regain match fitness after another lengthy injury lay-off.
As a result, he was not on the pitch when Arsenal keeper Manuel Almunia bundled Ryan Taylor to the ground with 23 minutes gone and referee Mark Halsey pointed to the spot.
Ten-goal Owen would have taken the penalty had he been in the starting line-up, but in his absence, Obafemi Martins shot tamely to Almunia's left and the keeper redeemed himself.
The miss was to prove costly 12 minutes into the second half when Nicklas Bendtner headed an Andrey Arshavin free-kick past Steve Harper, and although Martins levelled within seconds, the hope he sparked was short-lived.
Arsene Wenger's men simply increased their tempo and when Abou Diaby struck with Steven Taylor off the pitch for treatment for several minutes before a substitution was made, and Samir Nasri added a third moments later, the game was over.
Indeed, had it not been for Harper's heroics, the visitors might have run out even more comfortable winners on a day when Newcastle's plight was brought into ever sharper focus.
Nolan said: "Against Arsenal, you have to take your chances, and we had plenty of them for the first hour especially.
"But that's why they are a class side, that's why they are in the Champions League year in, year out, because they punish you if you don't punish them when you have your chances.
"But we are still in touch with everybody around us, so it's not all sirens going off here at the moment.
"I would rather be here in the bottom three now than I would be in eight games, and I think we have got enough in the locker and enough in the changing room to get us out come the next eight games."
Home fixtures against Portsmouth, Middlesbrough and Fulham, as well as the trip to Stoke on April 11, seem likely to hold the key to the Magpies' destiny, although their need is growing increasingly desperate.
They have won just one of their last 12 Premier League games, and have collected all three points on home turf just four times in 15 attempts to date.
Significantly, they have completed only one double, over bottom-of-the-table West Brom, and have taken just two points from a possible 18 against fellow strugglers Hull, Sunderland and Blackburn.
A little less than a year ago, then manager Kevin Keegan was severely reprimanded by owner Mike Ashley for admitting the club was a million miles away from challenging for the top four after a comprehensive home defeat by Chelsea.
Keegan, who jumped ship in September in protest at what he saw as a kamikaze recruitment policy, appears to have been wrong only in that he under-estimated the gap.