Mika Biereth then grabbed a double for the Gunners, smashing home from a free-kick before converting from the spot, which looked to have put the game out of reach for Brian Barry-Murphy's side.
However, a long-range strike from Delap gave us hope in the 93rd minute, before the striker set up James McAtee to fire into the roof of the net and secure a dramatic point for City's EDS in the Premier League 2 title race.
City started the game firmly on the front foot, and when Romeo Lavia saw an early shot saved by Hubert Graczyck, it looked to be a warning sign of what was to come.
But with just 11 minutes played, our early pressure came undone when Sousa's miscued cross floated over Slicker and into the back of the net to hand the Gunners the lead.
We nearly took the lead right on the stroke of half-time, as McAtee played through Oscar Bobb into the box, but the Norwegian's effort was brilliantly denied by Graczyk, who ensured the scores were level at the half-time break.
The second 45 started as the first had ended with City pressing forward in search of a second, going close through Delap's shot from a tight angle, which hit the side netting.
However, like the first half, we fell behind against the run of play when City failed to clear an Arsenal free-kick, allowing Biereth to finish before the hour.
Arsenal came close to a third when Miguel Azeez's free-kick cannoned off the post, before Delap saw an effort whistle past the Arsenal woodwork at the other end of the pitch just minutes later.
McAtee was given a golden opportunity to score when some nice play from Borges and Delap set up the midfielder, but Graczyk got down quickly to deny us an equaliser.
And with just over ten minutes to go the Gunners seemingly put the game out of sight when Biereth converted from the spot after being brought down by Shea Charles inside the area.
Despite the setback, City kept pushing forward in search of a route back into the game, and Delap gave us hope when he rifled home an unstoppable drive from distance to set up a grandstand finish.
And with seconds left of added time, the forward turned provider, feeding McAtee with a deep cross which PL2's leading scorer duly converted, firing a left footed half-volley into the roof of the net to cue wild celebrations.
Defeat for City would have left our PL2 title defence at the mercy of second-placed West Ham, but a typically defiant response from the champions ensured we came away from North London with the most unlikely of points.
HOW WE LINED UP
Arsenal U23s: Graczyk, Walters, Kirk, Dinzeyi, Monlouis, Sousa, Henry-Francis, Azeez, Patino, Hutchinson, Biereth (C)
Subs: Ejheri, Rekik, Roberts, Butler-Oyedeji, Ideho
Manchester City EDS
Starting XI: Slicker, Oduroh, Charles, Katongo, Galvez, Lavia, Bobb, Gyabi, Delap (C), McAtee, Edozie
Subs: Lewis, van Sas, Borges, Sodje, Kayky
WHAT IT MEANS
With second-placed West Ham United beating Tottenham Hotspur tonight, the gap at the top of the league between us and the Hammers has decreased to six points.
West Ham have two games in hand over Brian Barry-Murphy's side, which could see them go level with us by the time we next play, but City hold a five-goal advantage over the Hammers.
With only two games left in our league campaign, the EDS will face Leeds United at Thorp Arch next in a crucial clash for the Premier League 2 title race.
Kick off in Yorkshire will be at 7pm on 22 April.
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