Ruud van Nistelrooy put the Reds ahead just before the break with an opportunist strike, but City, with new steel under boss Stuart Pearce, struck back.
Joey Barton was on hand to redirect Darius Vassell's shot into the net to stun Old Trafford.
The Blues almost snatched victory late on, but Edwin van der Sar saved brilliantly from Andy Cole.
A City win might have been tough luck on United, who dominated most of the contest, but Stuart Pearce is moulding a fiercely determined side at Eastlands. Not that Sir Alex Ferguson will take any comfort from that.
In the corresponding fixture last season, Kevin Keegan ditched his attacking philosophy to grind out a goalless draw, a move Pearce was largely credited with being the brains behind.
This time around, City were slightly less negative, but just as organised, retaining their shape and largely subduing a United midfield lacking a rested Roy Keane, although United might have been able to play with more freedom had referee Steve Bennett awarded the hosts a first-minute penalty when Ben Thatcher sent Rooney tumbling.
Temper
Despite his obvious frustration, the England striker just about managed to keep his fragile temper in check on that occasion and although their were flashes of teenage angst throughout the half, there was no loss of control on the scale of that shown in Belfast.
In fact, the biggest problem Rooney had was of his own making. Three times, the £27million forward broke clear of City challenges then slipped to the ground with no-one near him.
Balance issues aside, Rooney looked more likely to create an opening than anyone else on the pitch and typically, it was the 19-year-old who set up United's first opportunity, turning brilliantly after taking Alan Smith's pass with his back to goal before sending Park racing into the area.
Unfortunately for the South Korean, his first touch took him wide and his shot, though well hit, fizzed beyond the far post.
Before the opening period entered its one crucial additional minute, the only other chance United carved out came as something of a surprise to Van Nistelrooy, who seemed to be caught out when Park flicked on John O'Shea's cross.
Victorious
The Dutchman did manage a first-time shot but lofted tamely over James and his goal.
It was another 15 minutes before the pair came face to face again and this time Van Nistelrooy emerged victorious.
Amid the rancour over the offside flag which never came, James' magnificent save from Van Nistelrooy's initial flick will probably be overlooked.
Without doubt, the one-handed effort was one of the stops of the season and the discarded England keeper deserved far more than to see the rebound land straight back at Van Nistelrooy's feet, allowing the former PSV striker to ram home.
Victory could have been wrapped up within seconds of the restart when Rooney drilled a low cross to the edge of City's six-yard box. But neither Park nor Scholes could make firm contact, allowing the visitors to try and exploit growing nervousness in United ranks.
Even Rooney's electric talents gradually dimmed and the youngster responded to the abusive taunts of the City fans with a few gestures of his own.
Pretty soon though, it was Barton and Robbie Fowler who were jubilantly offering their opinions to the home support following City's unexpected equaliser
Just as James' heroics went unrewarded earlier, so Van der Sar's reaction save from Cole's strike proved in vain as Vassell blasted the rebound towards goal, where Barton flicked it in to set up a dramatic finale in which Cole so nearly supplied the killer touch.
What was your verdict on the game? Have your say.
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Man City are going to be one of the harder sides to beat as long as Dunne and Distan remain their first choice central defenders. Though Onuha has already been doing a great job at the back while Distan has been injured.
We still haven't seen the best of Kiki Msampa out on the left and I would like to see Lee Crooks given a chance on the right, though Sinclair is doing well.
I heard Mr Fergusson moaning after the game on the radio, but City deserved the point and could have gone on to win if Cole could have placed his last minute effort past his former Fulham team mate.
City, dispite still having a small squad, now have quality players on the bench to replace the first choice team.
They may not be league winners this season, but should be somewhere near the top in May, definitely close to a place in Europe. City should also do well in the cup competitions this season and may even reach a final.
United have had their day and need a change at the top. They will, of course, be in Europe again next season... Even if Rooney, Van Nistlerooy and Scholes have to sing the song themselves :-)
Sorry Lads, it's just not going to happen. No bite up front. We get the ball to 3/4 up and then there's really no penetration. May as well just use van de sar to boot it towards their keeper. Scholes has no appetite; Smith, Fletcher, Richardson, Giggs, keane and Ferdinand are not really international class players and are just OK for premiership. Nothing distinguishes Utd from other mediocre premiership outfits such as Blackburn or Portsmouth. We have one "striker", who is either just out of position or impossible to reach. same old same old as it has been at OT for about 3 years. Mid table position seems most likely.