wifi with Edimax nano usb adaptor

Hoping someone can help me out here. I have Volumio running nicely on a pi streaming mp3s from Windows desktop over wifi. I am using Edimax dongle and a PCM2704 DAC. The dongle and soundcard are connected to a powered usb hub.
However, I want a more compact setup for kitchen -just pi with Edimax connected directly to pi and using audio out of pi. When I try this I find that things work for a few minutes and then go wrong. Streaming stops and Web gui loses connection with pi. Lights still flickering on dongle but cannot connect via ssh either.
If left for a few minutes sound returns twice for a few seconds and then stops altogether. My initial thoughts were power issues. However I understand that ohters use this dongle directly on oi without problems. My power supply claims to be 5V 1200mA.
Any suggestions?