The brave Blues weathered a first half battering from the Spanish champions to twice take the lead only to surrender two goals in the last five minutes and with them all three points.
Borussia Dortmund won the other group game on the night defeating Ajax 1-0 in Germany.
Madrid have started this season poorly but looked back to their best in the opening 45 minutes as they peppered Joe Hart’s goal giving the City man plenty of chance to show why he is rated one of the best in the world.
Hart’s heroics kept the Blues in touch at the break and the whole side responded in a thrilling five-goal second half.
...Chris Bailey
Edin Dzeko fired City in front after wonderful through ball from Yaya Toure and only for Marcelo’s curler to level matters.
Aleks Kolarov’s free kick put the English champions back in front and just five minutes away from a famous victory.
But first Benzema and then Ronaldo earned a stunning win for Real Madrid who showed why they had romped to the title last season amassing 100 points and 121 goals.
Like their teams, the two managers went into the opening tie with little history either against one another on the pitch or in the mind games department. The pre-match build up was noticeable for compliments rather than barbs but the game was feisty enough.
Much of the pre-match chatter surrounded the fitness or otherwise of Sergio Aguero, well known in the other half of Madrid of course, and he was in the squad but consigned to the bench
Elsewhere there were changes from the side that had to come from behind to draw at Stoke on Saturday afternoon. Joleon Lescott went out and Nastasic came into the centre of the defence and there was no place for Scott Sinclair as David Silva returned to the side.
Despite the changes the Blues were on the receiving end in a first half in which Real had 76% of the possession and 16 goal attempts to City’s one.
Old adversary Ronaldo was the main thorn in the side and, as mentioned, Hart the hero for City as he saved brilliantly low down from the former United man in 9th minute and then pulled off a miracle effort from Higuain after Ronaldo’s shot was deflected.
Khedira and Di Maria also had chances for Real but couldn’t find the target. City worked hard as a unit but couldn’t get going as an attacking force with only a couple of lung-bursting Yaya Toure runs to show for their efforts.
The Blues also lost Samir Nasri in the 36th minute with what looked like a high hamstring strain.
A glance at Madrid’s home record last season in the UCL contained enough warnings. They won six straight home matches averaging four goals per game.
City fans were so far away from the playing surface that it made the away end at Newcastle appear pitch side, but it didn’t stop them from making their presence felt in the huge bowl that is the Bernabeu. How they celebrated the two second half goals which looked as though they had secured precious early points in an incredibly tough group.
The game crackled with attacking intent from the start of the second half but when the dust had settled from the Bernabeu gunfight it was Jose Mourinho who was blowing smoke from the end of his gun and Roberto Mancini left licking his wounds.
However, this group has a long way still to go!
