|Seconds out: Scholes nods the only goal with 17 seconds left at Eastlands [GALLO/GETTY]
Paul Scholes headed the winner in the last seconds of the Manchester derby to give United hope the in defence of their English Premier League title – and deal City a body blow in their chase for fourth place.
Chelsea lost 2-1 at Tottenham Hotspur as captain John Terry was sent off in the late match to put the gap at the top to just one point and move Spurs above City.
Veteran midfielder Scholes met Patrice Evra cross to angle a header just inside Shay Given's left-hand post with 17 seconds of injury time left as Alex Ferguson's side took home a 1-0 win from Eastlands.
City drop two points behind Spurs in the race for the fourth European Champions League spot.
United's win puts the Reds on 76 points, one behind Chelsea.
A tame nil-nil draw had seemed the only outcome as Ryan Giggs and a half-fit Wayne Rooney missed the best chances.
City had their own misfiring forward in the shape of Craig Bellamy, but the points could have gone to the blue half of Manchester had a goalmouth scramble with five minutes left fallen kindly to Nedum Onuoha or Carlos Tevez.
"I think we were the team that was pressing to score that last goal and we were lucky enough to win the game," former England star Scholes told Sky Sports.
"To win any game against City away from home is nice but it's all about the points."
Pain at the Lane
At White Hart Lane, Spurs took an early lead when Jermain Defoe scored a penalty following Terry's handball.
Gareth Bale made it two with a well-taken individual goal before the break and was felled by Terry after the break for the Chelsea captain's second yellow.
Roman Pavlyuchenko missed two simple chances for Spurs and the north Londoners almost paid when Frank Lampard scored an injury time goal.
Elsewhere, Sunderland edged Burnley nearer relegation with a 2-1 home win while second-bottom Hull remained in the drop zone after a goalless draw away to Birmingham.
Australia international Tim Cahill's 10th goal of the season boosted Everton's European hopes as he scored the winner in a 3-2 victory away to Blackburn Rovers.
Bolton all but assured themselves of Premier League football next season after two goals in the final five minutes from Matt Taylor saw them come from behind to beat Stoke 2-1.
Wolves inched nearer safety with a goalless draw away to Europa League semi-finalists Fulham.
Darren Bent and Alan Hutton set up Frazier Campbell's 25th minute opener for Sunderland.
Campbell returned the favour when, five minutes before half time, his header was volleyed in by England striker Bent.
Steven Thompson gave Burnley hope with an 82nd minute goal.
Everton took the lead at Ewood Park through Mikel Arteta's fourth minute penalty after the Spaniard was brought down by New Zealand's Ryan Nelsen.
But Rovers levelled after Steven Nzonzi let fly with a swerving 30-yard shot in the 69th minute.
Substitutes then scored for both sides, Everton forward Yakubu heading the visitors 2-1 up less than 30 seconds after coming on before Rovers striker Jason Roberts equalised nine minutes from time.
Yakubu then turned provider for Cahill's 90th minute winner, the midfielder scoring with his foot rather than his head for a change.
At the Britannia Stadium, Stoke striker Dave Kitson fired the hosts into a 13th minute lead.
Bolton equalised through Taylor's free-kick five minutes from time before, in the 88th minute, he turned in Vladimir Weiss's cross.
Wigan, still not yet assured of Premier League survival, are at home to Arsenal on Sunday with the Gunners looking to bounce back from their midweek derby defeat by Tottenham.
Meanwhile, already-relegated Portsmouth are at home to Aston Villa.
Liverpool, on the market after US co-owners Tom Hicks and George Gillett put the club up for sale on Friday, face strugglers West Ham at Anfield on Monday.