The midfielder broke the deadlock in the 81st minute as the Royals eventually overcame a dogged Forest side to spark wild celebrations by the home fans.
The goal came minutes after news filtered through that nearest challengers West Ham had been held to a 1-1 draw by Bristol City at Ashton Gate.
Forest, though, came close to snatching a point and putting the champagne on ice but substitute Marcus Tudgay's header was cleared off the line by Alex Pearce with the striker's follow-up effort being kept out by Adam Federici deep into injury time.
It was Reading's sixth successive win, eighth in a row at home and their 15th in the last 17 games, form which has seen them leapfrog long-time leaders Southampton at the summit.
Despite the defeat, only their second in eight games, Forest secured Championship football for another season with Coventry losing at home to Millwall.
Forest made a strong start and Lewis McGugan had an early sight of goal only to drag his 12-yard shot wide.
Reading were struggling to build any momentum, although they did have the ball in the net after 19 minutes. But Noel Hunt was penalised for a foul on Forest keeper Lee Camp from Jobi McAnuff's free-kick, with Jason Roberts having tapped home.
Moments later, Federici - widely regarded as one of the best keepers outside the Premier League - reacted quickly to get down to Adlene Guedioura's effort from range.
The home side were still to find their rhythm and it was again Forest who threatened, Dexter Blackstock turning and shooting at Federici.
Camp was finally tested when Hayden Mullins fired a shot from 18 yards with the midfielder then seeing another effort charged down by Forest defender Luke Chambers as Reading eventually started to get going.
Reading came out in the second half with much more purpose and had an early chance to take the lead but Hunt headed well wide from Jimmy Kebe's cross.
They went close again shortly afterwards but excellent defending from George Elokobi prevented Hunt from connecting to Ian Harte's far-post cross.
Elokobi then threatened at the other end as his overhead kick from McGugan's corner just cleared the bar.
Reading boss Brian McDermott then threw on Adam Le Fondre - the match-winner from the bench in last Friday's win at Southampton - in the 58th minute as he sought a repeat of the striker's heroics.
Seven minutes later Le Fondre had the best opportunity of the game. He chased down a lost cause and found himself with Camp to beat but he dinked his shot over the keeper and wide.
Luke Chambers headed a McGugan corner over before Elokobi skimmed the bar moments later with 20 minutes left as Forest still looked threatening.
But after hearing news of West Ham's draw at Bristol City, the Reading fans roared their team on and they got the crucial goal with nine minutes left, Leigertwood bundling in Harte's free-kick.
The stadium was rocking and Le Fondre was denied a chance to wrap the game up by a fine save from Camp before Reading survived a late scare.