City's number 10 had put our young blues ahead early in the second half before Blackburn's Ashley Phillips headed the visitors level shortly after.
And just three minutes later, Daniel Pike's long-range strike pulled the visitors ahead, before a late free-kick from McAtee looked to have salvaged a point.
But more drama was to follow as McAtee left-footed strike put City ahead in the 89th minute before Romeo Lavia's saved penalty was nodded home by the midfielder to put the result beyond doubt.
It was a cagey first half as both teams settled into the game.
Blackburn had set up with a back five, soaking up the City pressure for most of the first half, although the Lancashire side were looking dangerous on the counter.
But it was City who produced the best chance of the half, as Micah Hamilton broke free inside the box, firing a shot goalwards which had to be punched away by Blackburn keeper Antonios Stergiakis.
Manager Brian Barry-Murphy changed systems at half- time, reverting to a back three, and the switch paid dividends when a scooped ball over the top was latched onto by McAtee, who poked past Stergiakis to give us the lead on 54 minutes.
But the away side were back level just six minutes later after a free-kick from by the corner flag was nodded home by Rovers defender Phillips, who had found himself free at the back post.
Then the visitors found themselves ahead only three minutes later, when a free-kick routine fell to defender Pike 25 yards from goal, and the full-back’s strike arrowed into the bottom corner with City keeper Mikki Van Sas unsighted.
The young blues kept pushing forward as we looked for an equaliser, and when McAtee's left-footed free-kick found the back of the net in the 87th minute, it looked as though we'd earned a deserved share of the spoils.
But in dramatic fashion, McAtee secured his hattrick and the three points for City with a brilliantly taken left-footed strike that squeezed past the Rovers stopper as stoppage time beckoned.
And the goals didn't stop there as Oscar Bobb was pulled down in the box late on, with Lavia heading home on the rebound after his initial spotkick was saved by Stergiakis.
HOW WE LINED UP
WHAT IT MEANS
The dramatic comeback secured our first three points of the season in Premier League 2, seeing the Elite Development Squad shoot up to 2nd in the league table, and continue our unbeaten start to the season.
Our Elite Development Squad face a Manchester derby next Saturday, as we take on Manchester United at the Aon Training Complex, kick-off is at 2:00 pm and you can catch all the action with a subscription to CITY+.
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