Balotelli escapes red card to sink Spurs
The reverse fixtures ended 13-3 in favour of the Manchester clubs in August when United crushed Arsenal 8-2 and City overwhelmed Spurs 5-1 and while there was no repeat of those drubbings the title race looks increasingly like a fight between the two north-west rivals.
City's 100 percent home record seemed about to end after third-placed Tottenham recovered from a two-goal deficit in a mad nine-minute spell midway through the second half in which goals from Jermain Defoe and Gareth Bale cancelled out strikes by City's Samir Nasri and Joleon Lescott.
However, after Defoe was a whisker away from sealing a remarkable Tottenham victory in stoppage-time Balotelli struck from the penalty spot after being brought down by Ledley King.
Spurs manager Harry Redknapp's mood was not helped by Balotelli's earlier stamp to the head of Scott Parker which went unpunished by referee Howard Webb.
"Scott's got a lovely cut on his head," Redknapp told a news conference. "I don't like seeing people react like that... it was wrong," Redknapp said.
City manager Roberto Mancini, who sent his assistant David Platt to talk to the media due to a sore throat, was not happy with way his side had flirted with defeat.
"The manager's words in the dressing room afterwards - his voice wasn't loud but his words were very, very profound because he felt regardless of the fact it's a great victory and we take another three points against somebody who is up there as well, he is not happy," Platt said.
"He made that clear in no uncertain terms because it gave them a foothold back into the game."
City moved to 54 points from 22 games with champions Manchester United on 51. Spurs stayed third with 46.
United responded well by winning a less dramatic but equally exciting game at Emirates Stadium to leave Arsenal a distant fifth after a third consecutive league defeat.
Antonio Valencia and Danny Welbeck scored for United either side of Robin van Persie's equaliser for Arsenal.
"It was an amazing amount of chances we had considering we were at the Emirates," United manager Sir Alex Ferguson told Sky Sports. "To only score two is a bit disappointing.
"Winning after City won their game was the important thing. And we've done it the right way, being adventurous and positive. I'm delighted with that."
There was little to choose between City and Spurs in an absorbing first half but clearcut chances were thin on the ground.
That all changed 11 minutes after the break when the lively David Silva set up Nasri to finish with a first-time strike.
Silva then swept in a corner that Edin Dzeko flicked on towards Lescott in the box and the defender bundled both himself and the ball into the net.
While the home fans were still celebrating, Spurs striker Defoe pounced when City defender Savic made a mess of a header intended for goalkeeper Joe Hart.
The ball fell short and Defoe, starting in place of Emmanuel Adebayor who was ineligible to play against his parent club, rounded Hart to score from a tight angle.
Spurs made it 2-2 when Bale curled an unstoppable first-time shot out of the reach of Hart.
City brought on Balotelli and the Italian soon found himself in the referee's book for a foul on Benoit Assou-Ekotto. He then seemed to stamp on Parker's head after he had a shot blocked by the Spurs midfielder.
Defoe should have won it for Spurs but could not stretch far enough to turn in Bale's low cross and City went up the other end where Balotelli tumbled over King's outstretched leg and then kept his cool from the spot.