Shortly after City announced he would be staying, Tevez captained the side against Everton at Eastlands but could not inspire them to the victory that would have taken them to the top of the table.
He battled away up front with little impact as City suffered a 2-1 defeat that left them in third place having missed the chance to top the table at Christmas for the first time since 1929.
In many ways, it was the same old City who have a history of faltering when the main chance comes their way. They blew their opportunity of a Champions League place when they lost to Tottenham Hotspur in their last home match last season.
They also suffered telling losses to Manchester United in the League and League Cup by conceding late goals last season, and on Monday they squandered another good chance of an important victory.
Tevez was closely marshalled by his former City team mate Sylvain Distin, a tower in the Everton defence, and his best chance came in stoppage time when his powerful shot was parried away by Everton goalkeeper Tim Howard.
City manager Roberto Mancini told Sky Sports he was pleased Tevez was staying.
"I think we resolved the situation and we are very happy for this. It is good news" he said.
Earlier, City said in a statement on their website that the Argentine international had withdrawn his demand - a move guaranteed to delight the club's fans, who were rather muted in their approach to him during the game, neither booing or cheering him."
The 26-year-old asked to leave last week, saying his relationship with certain officials at Eastlands had broken down and was "beyond repair".
But City said "clear the air" talks had been held with Tevez who had expressed his "absolute commitment" to the club. He was named as captain against Everton in his first match since last week's upheaval.
"Carlos is a world-class player whose contribution since he joined the club has been invaluable," Mancini said in the statement.
"I am pleased that we are now able to focus on pure football matters and to be able to look forward to Carlos continuing to play a significant role in the club's progress."
ARCH-RIVALS
Tevez, who joined City from arch-rivals Manchester United 18 months ago, has netted 33 goals in 50 league appearances for the Blues and is their top scorer this season with 10 goals.
He still has three-and-a-half years left on his five-year contract, but has repeatedly hinted he is unhappy at the club, homesick for his young family in Argentina and disillusioned with football in general.
City's Arab owner, the billionaire Sheikh Mansour bin Zayed Al Nahyan of Abu Dhabi, has invested more than 800 million pounds in new players in a bid to bring success and Tevez is an integral part of those plans.
Monday's match was his first since City beat Bolton Wanderers 1-0 on December 4 when he scored the only goal.
He missed last week's 1-1 draw with Juventus in the Europa League, but ha
