Two goals from Everton in the opening twenty minutes proved decisive as City failed to rise to the occasion and only when the visitor’s were reduced to ten men in the second half did City begin to threaten.
For Everton this was a fifth consecutive league win at the City of Manchester Stadium and ruined what should have been an historic moment for the homes fans who had hoped to see their team top the league for the first time in 71 years over the festive period.
And the game had started with the news for City that Carlos Tevez had withdrawn his transfer request, but that was as good as it got.
The Australian international then turned provider in the 19th minute allowing Leighton Baines to double the Merseysiders advantage to stun the home crowd.
City were handed a lifeline on the hour when Victor Anichebe received a second yellow and City quickly reduced the deficit when Yaya Toure's shot deflected in off Phil Jagielka.
The home side then laid siege to the Everton goal but Tim Howard in goal and the rest of his defence stood firm.
Roberto Mancini’s miserable night was then complete when Kolo Toure was sent off for a second yellow in the final minute.
Referee: Peter Walton
Venue: City of Manchester Stadium
Man City scorers: Jagielka og 72
Everton scorers: Cahill 4, Baines 19
04 Kompany (yellow card)
28 Kolo Toure (yellow card, red card)
07 Milner (A Johnson 46)
18 Barry (yellow card)
42 Yaya Toure
45 Balotelli (Jo 83)
11 A Johnson,
06 Jagielka (Hibbert 79)
23 Coleman (Saha 76)
21 Osman (Bilyaletdinov 75)
25 Fellaini (yellow card)
28 Anichebe (yellow card, red card)
19 Magaye Gueye,