Matt Ritchie's penalty 10 minutes from time sealed one of the most surprising results of the season to leave Liverpool with the chance to move seven points clear with a victory over Leicester City on Wednesday.
Sergio Aguero looked to have set a predictable tone for Pep Guardiola's 100th top-flight game at the helm, his goal after 24 seconds apparently teeing the Catalan up for a record 74th win from that century of outings.
But City failed to build on that fast start and the hosts levelled through Salomon Rondon with 24 minutes remaining.
And when Fernandinho fouled Sean Longstaff in the box, Ritchie stepped up to drive his spot-kick underneath Ederson and strike what could be a pivotal blow in the title race.
With City having taken 46 points from the last 48 available against the Magpies, Rafael Benitez may well have hoped just to keep things tight early on.
Any such plans were shattered before he even had the chance to warm his seat.
David Silva stumbled into Raheem Sterling's cross, diverting the ball into Aguero's path for the striker to volley home his 15th goal in 13 top-flight outings against Newcastle.
24 - Sergio Aguero's goal after 24 seconds was the fastest Manchester City have scored in a Premier League game since Jesus Navas scored after 13 seconds against Tottenham Hotspur in November 2013. Rapid. pic.twitter.com/bbMqk4cwAW— OptaJoe (@OptaJoe) January 29, 2019
Aguero was celebrating a second in the 18th minute, but referee Paul Tierney ruled that Kevin De Bruyne was a little too eager in executing a quickly taken free-kick and booked the Belgium midfielder.
To their credit, the hosts held firm for the remainder of the first half, although Florian Lejeune had to be alert to block Silva's shot on the line.
Sterling came within a whisker of doubling the lead early in the second half but allowed Leroy Sane's cross to go through his legs, while Silva stung Martin Dubravka's palms.
Then came the unexpected revival as Rondon, who had cut an isolated figure, sprung to life to lash home after City were caught napping by Isaac Hayden's header over the top.
Ritchie calmly converted from the spot and City could not muster a meaningful response, leaving Liverpool with a golden opportunity to put one hand on a maiden Premier League trophy triumph.
What does it mean? They think it's all over...
Guardiola conceded that his City side could ill-afford to drop any more points in order to retain their crown. Even if they should now win all their remaining 14 games, City would fall short of the 100 points they achieved last season. The title may already have been Liverpool's to lose, but they would have to throw it away now.
Benitez the mastermind
All the talk will be about City losing, but Newcastle won this game fair and square and they did it despite going behind so early on. They stuck to the game plan, stayed in the contest and picked their moments. Credit has to go to the Newcastle boss for pulling this one off.
He has been so important to City, and Guardiola has acknowledged as much, but Fernandinho's moment of madness in conceding the penalty could be the act that ended his side's bid for glory.
Key Opta facts
- Newcastle have beaten Manchester City in a Premier League game for the first time since September 2005, ending a run of 22 meetings without a win (D3 L19).
- Only Jose Mourinho (W73 D18 L9 – 237 points) picked up more points than Guardiola (W73 D15 L12 – 234 points) in his first 100 games in England's top flight.
1 - Only Jose Mourinho (237 points) picked up more points in his first 100 Premier League games as a manager than the Pep Guardiola (234). Special. pic.twitter.com/Y8w7jLepmW— OptaJoe (@OptaJoe) January 29, 2019
- Manchester City have now dropped 16 points in their 24 Premier League games this season, having drawn twice and lost four times; already more than they dropped in the entirety of 2017-18 (14 – D4, L2).
- City have lost three games in which they have been ahead in the Premier League this season, their most in a single campaign since 2008-09 (four).
- Aguero's goal after 24 seconds was the earliest goal scored in this season's Premier League and the fastest Manchester City have scored since Jesus Navas netted after 13 seconds against Tottenham in November 2013.
- All 30 of Salomon Rondon’s Premier League goals have been scored from inside the box – of current Premier League players, only Javier Hernandez (49) has netted more, with 100 per cent being from inside the area.
City will lick their wounds before hosting Arsenal on Sunday, having won 2-0 in north London on the opening weekend of the campaign, while Newcastle head to Wembley to face Tottenham the day before.