Pep Guardiola's side dominated the first period, with good chances for David Silva, Pablo Zabaleta and Sergio Aguero but were kept out by Hugo Lloris.
The Frenchman became the villain as he gifted goals to Leroy Sane and Kevin De Bruyne. However Spurs managed to get back in it with goals from Dele Alli and Heung-Min Son secured the point for Spurs.
Applying the pressure
Both side entered this top of the table clash looking to keep the pressure on the other top four sides, and the hosts looked to break back into the top-four as they dominated the opening period.
The first real shot on goal came in the 20th minute, as Silva tries one from 20 yards but Lloris did well to get down low and turn it around the post. They came even closer from the resulting as it came out to Zabaleta on the edge of the area, with his effort leaving Lloris rooted but it was inches wide.
Aguero then had his assault on goal as the half was coming to a close, with his first opportunity coming in the 38th minute. It was a looping header from the Argentine, which dramatically grabbed out of the air by Lloris. He was at it again a minute later, as he aimed for the near post but Lloris was equal to it as he got down it.
It only took four minutes of the second half for City to take the lead, and though it was deserving they were gifted it by a terrible Lloris error. It was an excellent ball from De Bruyne as he sprayed it across the pitch looking for Sane. Lloris came flying off his line looking to clear, but only managed to assist the young German heading it into his path for him to tap home into a empty net.
City were two up five minutes later, and once again it was gifted to them by the Spurs skipper. De Bruyne turned scorer as Raheem Sterling was released down the wing, but his cross into the area looked to have gone as Lloris looked to have claimed the ball. However he managed to drop i, and De Bruyne was alive to the situation to tap home.
Getting back in it
Going two behind seemed to kick Mauricio Pochettino's side into life, and they showed great character to get themselves back into the crucial clash.
The first came just before the hour mark, and it is fair to say it came from nowhere for Spurs. The ball came out to Danny Rose on the wing, and put in a excellent ball which was flicked on by Aleksandar Kolarov and Alli was there to head home their first shot on target.
Spurs continue to push for an equaliser as the clocked ticked down, and it came with 13 minutes to play and in some controversy. Sterling looked to be adding a third as he was one-on-one with Lloris, but knocked off guard as Walker pushed him over which was waved away by Andre Marriner.
Spurs broke up the field with Christian Eriksen playing it in to Harry Kane, the striker flicked it brilliantly into the path of Son who coolly slotted it beyond Claudio Bravo.
The Etihad Stadium erupted as Gabriel Jesus looked to have completed a dream debut, the ball was good De Bruyne as Jesus slid in at the back post but the flag was rightfully and Guardiola's frustration was clear.