The title party will have to wait at least another couple of weeks as the Blues spurned several chances to add to the score-line when in total control and paid the price after the break to complete a miserable week for the champions-elect.
After the capacity Etihad crowd had given a minute’s applause in memory of the late Ray Wilkins, the Manchester derby got underway.
With an electric atmosphere and the City fans in great voice, the Blues, with four changes from the midweek defeat at Anfield, set about trying to get the three points that would secure a third title in seven years.
With no recognised striker on the pitch, Raheem Sterling took on a more central role and was soon making a nuisance of himself, closing down and snapping at the heels of United defenders.
And there were huge shouts for a penalty just six minutes in as a low Leroy Sane cross appeared to hit the arm of the prostrate Ashley Young, but the appeals fell on deaf ears.
The next half-chance wasn’t until the 22nd minute when Bernardo Silva’s poke at goal from close range was palmed out by David de Gea.
Three minutes later and the Blues were ahead. Sane whipped in a corner and, in almost a carbon copy of the goal he scored against United in 2012, Vincent Kompany rose higher than anyone else to send a thumping header past de Gea and send the City fans wild.
It was Captain Fantastic stuff from a player who will undoubtedly go down in Club history as one of our greatest skippers ever.
The confidence that drained out of the Blues against Liverpool was suddenly restored and the football that followed tore the United defence to shreds and within five minutes it was 2-0.
City poured forward and referee Martin Atkinson waved advantage as Sane was fouled and the ball ran on to Sterling who played a short pass to Ilkay Gundogan and the German span off his marker and toe-poked the ball into the corner from close range.
In the 15 first-half minutes that remained, the Blues were at their sublime best and Sterling could have helped himself to a hat-trick as he blasted two shots over the bar when clean through and hit another straight at de Gea - Gundogan also headed tamely into the United keeper's arms when clean through.
The Blues should have been home and hosed by the half-time whistle and a four or five-goal advantage would not have been flattering.
But there was to be a huge twist in the tale with the script torn up after the break.
City were again guilty of failing to put the game to bed when Gundogan side-footed over from 10 yards on 50 minutes after good work by Sterling – and it proved costly as, incredibly, given what had gone before, the scores were level just five minutes later.
First Alexis Sanchez crossed in from the right and Ander Herrera’s chested pass allowed Paul Pogba to score from close range.
Two minutes after that, Sanchez crossed from the left and Pogba rose high to guide the ball past Ederson and somehow claw United onto level terms.
It was cruel on City who had been so dominant for so long, but there was worse to come as Sanchez provided another telling cross from the left that found the unmarked Chris Smalling who couldn’t miss from close range.
With the home support left scratching their heads, the game had been turned on its head and, it seemed, the title celebrations would have to wait for another day.
City were denied what looked like another strong penalty shout in the time that remained as sub Sergio Aguero was brought down by Young’s high challenge, but again the officials weren’t interested.
There was still time for Aguero to connect with Sane’s cross only to see De Gea tip his header over from point blank range.
The title may not be in the bag, but hopefully it won’t be too long before City are crowned champions.
The officials' decision not to award one of two possible spot-kicks - the second of those appeals would have almost certainly been given had VAR been in operation.
What it means
City may have to wait a fortnight or more to lift the Premier League crown.
United can finish with 89 points if they win all their games and the Blues are currently on 84.
City now turn attention to Tuesday night’s Champions League second leg quarter-final tie with Liverpool.
Trailing 3-0, the Blues must at least match that score-line to force extra time and possibly penalties, or, if Liverpool score, by four clear goals.
Then it’s off to Wembley next Saturday to face Tottenham in the Premier League where anything other than a win could extend City's wait for another two games at least.