  We have measured the cross section
$\sigma(e^+e^-\to\pi^+\pi^-\gamma(\gamma))$ at DA$\Phi$NE, the Frascati
\phi-factory, using events with initial state radiation photons emitted at
small angle and inclusive of final state radiation. We present the analysis of
a new data set corresponding to an integrated luminosity of 240 pb$^{-1}$. We
have achieved a reduced systematic uncertainty with respect to previously
published KLOE results. From the cross section we obtain the pion form factor
and the contribution to the muon magnetic anomaly from two pion states in the
mass range $0.592 < M_{\pi\pi} < 0.975$ GeV. For the latter we find $\Delta
a^{\pi\pi}_\mu = (387.2\pm0.5_{\rm stat}\pm2.4_{\rm exp}\pm2.3_{\rm th})\times
10^{-10}$

High Energy Physics - Experiment