The champions had appeared on course for a club-record 10th successive win in all competitions when they led 2-0 at half-time thanks to goals from David Silva and Fernandinho.
However, the visitors caused a huge shock after the break by drawing level following strikes from George Boyd, albeit from an offside position, followed by a sensational Ashley Barnes goal nine minutes from time to hand the Clarets a deserved share of the spoils.
City will regret dropping two valuable points on home soil though, especially given that Premier League leaders Chelsea had earlier also been held 1-1 at Southampton, meaning that the gap to the west London club remains at three points as we reach exactly the halfway point of the season.
And yet Manuel Pellegrini’s side had looked in no trouble whatsoever as they left the pitch for half-time having dominated the opening 45 minutes, with two goals to show for their efforts, while it could have been many more.
As after a sluggish start in which the home team appeared to be suffering the effects of having to play two games in the space of just three days, City opened the scoring midway through the first period courtesy of in-form Spain international playmaker Silva’s fourth strike in his last three matches.
And what a goal it was too after some lovely build-up play down the right involving Samir Nasri, Pablo Zabaleta and then finally Jesus Navas, before the little winger picked out his compatriot six yards out to coolly fire City in front.
Ten minutes later and yet more slick passing involving James Milner and Nasri ended with Brazil holding midfielder Fernandinho placing an accurate shot in off the underside of the crossbar from the edge of the box.
Burnley, though, were not without their own moments of promise in the first half, albeit mostly from set plays or on the counter-attack, and when they halved the deficit two minutes after the restart, the whole momentum of the match changed dramatically.
The home team will no doubt point to the fact that Burney midfielder Boyd was just fractionally offside when he managed to divert Danny Ings’s cross-cum-shot past City’s stand-in captain Joe Hart.
However, it was no more than the Clarets deserved for all their efforts up to that point and despite Tom Heaton in the visitors’ goal needing to pull off an impressive one-handed save to prevent Nasri from making it 3-1 just minutes later, from that point on there appeared only one team likely to score the next goal.
That strike duly arrived with just nine minutes left when the ball dropped kindly at the feet of Burnley frontman Barnes in the area after the visitors had launched a free kick high into the City box, before the 25-year-old fired an unstoppable effort high into the top right-hand corner of Hart’s net.
And despite Pellegrini throwing Frank Lampard on for the 600th league appaerance of his illustrious club career, not even the veteran goalscoring midfielder could find his adopted club a late winner to close the gap on rivals Chelsea at the top of the table.
Soccer Special verdict – Alan McInally
“Everyone who had seen the results at half-time would have thought it was going to finish three or four nil, maybe Burnley get a consolation, but that was not the case.
“City did not start the game very well. Burnley got a little bit of luck when they got back into the game with Boyd being just offside for his goal, but then the whole game changed. Burnley’s whole demeanour changed, and what a shift they put in against the champions.
“No [Vincent] Kompany for City, a real leader, organiser and someone who shouts at the back four constantly. Yes they do still have huge experience at both left and right back, but they were suspect in the middle without Kompany. And no Yaya Toure in the middle of the park is also a problem.
“They did try and go for it near the end, but it was not a good second half and what a window of opportunity it was for City today. They already know the Chelsea game has finished 1-1, at half-time they are thinking that will do, we are a point behind.
“But it just was not the case and Burnley were excellent and incidentally, they deserved a point for their second-half performance, while Dyche deserves a big pat on the back today.”
Man City: Hart (6), Zabaleta (7), Demichelis (7), Mangala (5), Kolarov (7), Fernando (7), Fernandinho (7), Navas (6), Silva (9), Nasri (8), Milner (7)
Subs: Sinclair (6), Lampard (6), Jovetic (6)
Burnley: Heaton (7), Trippier (7), Keane (7), Shackell (7), Mee (7), Boyd (7), Marney (6), Jones (6), Arfield (7), Ings (7), Barnes (8),
Man of the Match: David Silva