Paul Ifill came to prominence as the game went on and produced a few searching crosses throughout the game, but the result was sealed by Muscat.
Recently he had copped some ribbing from his team-mates over his extended goal drought but he ended it in stunning fashion when he broke clear, turned the ball to his left foot and curled it around Newcastle keeper Ben Kennedy.
The goal triggered wild celebrations among the players, who also realised a victory would take them to the giddy heights of third place on the A-League ladder.
They are two points clear of the Melbourne Heart, although the Heart play tomorrow when they host the second-placed Brisbane Roar.
Newcastle had their chances and enjoyed periods of domination in the first 30 minutes of the game as the Phoenix struggled to hold the ball in the middle of the park.
Phoenix coach Ricki Herbert stuck with the same squad that defeated Gold Coast, which meant another appearance from the bench from All White Leo Bertos, who came on in the 66th minute for Nicky Ward.
Mark Paston, who started only his third game of the season, kept another clean sheet in an assured performance from the big custodian who looks set for an extended stay between the sticks providing he can keep fit.
Daniel also achieved a significant milestone when he came from the bench in stoppage time for the Phoenix as he became the second player behind Tim Brown to make 100 appearances for the club.
The 32-year-old, who will become eligible to represent the All Whites later this year, scored the first goal for the Wellingtonians in their opening game against Melbourne Victory in 2007.
The Phoenix now enjoy a nine-day break before their next home game when they host the Heart at Westpac Stadium on January 29 in what shapes as a pivotal clash in the Wellington side's home playoff chances.
