Micah Richards also had a late goal controversially disallowed for offside on a day the Blues, far from their best, will want to forget in a hurry.
City have now dropped behind neighbours United in the race to win the Premier League, though hopefully there are plenty of twists and turns to come - and the fact remains that if the Blues were to win their remaining matches, the title would be coming back to the Etihad Stadium.
The Liberty Stadium made for a picture perfect setting with the pitch resplendent and bathed in early spring sunshine.
City arrived in South Wales on the back of four successive Premier League wins on the bounce but were up against one of the meanest home defences in the top-flight with Swansea the next best after the Blues having conceded just ten goals in 13 home games.
The loss of first-choice central defenders Vincent Kompany and Joleon Lescott meant a first-time partnership of Kolo Toure and Stefan Savic while Mario Balotelli’s cameo in Lisbon won him a starting place up front.
Richards also returned after injury as City attempted to maintain a lead at the top of the table they’d held since early October.
Swansea flew out of the blocks and dominated the early exchanges and with just five minutes played, the hosts were given a golden opportunity to take the lead.
Wayne Routledge burst into the box and as he poked it past Joe Hart, he tumbled over the England keeper and Lee Mason pointed to the spot – but Scott Sinclair’s penalty was well saved by Hart and the Blues survived.
Swansea continued to look dangerous and were causing problems with their slick passing and movement – so much so that it prompted Robert Mancini to make a tactical switch with only 37 minutes on the clock.
Gareth Barry was withdrawn and replaced by Sergio Aguero, with Yaya Toure dropping further back in midfield – it immediately had an effect with the Blues coming close twice through Balotelli and David Silva following a succession of corners.
The second-half began as the first 45 had with City fortunate not to go behind as Kolo Toure’s desperate lunge was just enough to prevent two Swansea forwards tapping in from close range – it was hairy, edge-of-the seat stuff but the Blues – a long way from their best – remained on level terms.
The Blues, however, gradually started to control the game as time went on. With Swansea packing ten men behind the ball each time City attacked, it seemed a matter of time before Silva or Samir Nasri unpicked the lock.
Yet the hosts remained a threat each time they pressed forward and they allowed the Blues little or no room to create any clear-cut chances in what was increasingly becoming a frustrating afternoon.
Then, with a point looking like a reasonable result, substitute Luke Moore headed home from close range after a Savic error on the halfway line was punished in full - it was a crushing blow and memories of the 1-0 defeat at Sunderland came flooding back.
City suddenly piled forward and forced Vorm into several fine saves in the time that remained - but it was too little, too late.
There was still time for Richards to head home at the far post in injury time, but the assistant referee’s flag was raised – despite TV replays suggesting it was borderline.
Not a good day for the Blues’ title hopes, but there is still a long way to go.
