Rooney's overhead volley secured victory for Manchester United
Wayne Rooney's spectacular late winner put Manchester United's Premier League title assault back on course and left Manchester City devastated at Old Trafford.
David Silva's deflected equaliser put Roberto Mancini's side in sight of a point after Nani's first-half goal gave United a slender advantage in a tight and tense encounter.
It was Rooney, however, who produced a moment of inspiration to score a stunning overhead kick that will live forever in the memory of United's fans and extended City's dismal sequence of only one league win in their last 27 visits to Old Trafford.
Silva's fortunate leveller, unwittingly deflecting in substitute Edin Dzeko's shot via his back, had given City momentum but they were stopped in their tracks in the most dramatic fashion with only 12 minutes left.
Nani's cross from the right flank was high and behind Rooney as he lurked near the penalty spot, but he elevated an indifferent personal display to the heights by readjusting his position and sending an acrobatic, unstoppable overhead kick high past startled City keeper Joe Hart.
The quality of the goal was worthy of winning any game and United boss Sir Alex Ferguson may even look back on it as a strike that won the title after they bounced back from their first Premier League defeat of the season at Wolves last Saturday.
Rooney, superbly shackled by City defender Vincent Kompany for so long as United boss Sir Alex Ferguson surprisingly left Dimitar Berbatov on the bench, had previously cut a forlorn and frustrated figure, but his natural instincts continue to serve him and United so well.
It enabled them to extend their lead at the top of the table to seven points at the final whistle - and also inflicted a serious blow to City's own lingering hopes of mounting a challenge as they now stand eight points behind United having played a game more.
City were left to regret failing to make the most of some early supremacy when Silva squandered the perfect opportunity to strike a crucial blow early on in the second minute.
United boss Ferguson entrusted Rooney with a lone attacking role - and in the opening stages it was City who made all the running and should have taken the lead in the opening moments.
Silva, a significant influence as City dominated, exchanged passes with Carlos Tevez inside the area and was left with only Edwin van der Sar to beat. The angle was acute but the gifted Spaniard was wasteful as he rolled a tame finish across the face of goal and inches wide.
The hulking figure of Yaya Toure also cast a giant shadow over United's midfield as they struggled to assert any authority and he was frustrated when referee Andre Marriner ignored his penalty appeals when his cross struck Chris Smalling.
As United finally started to pose a threat Darren Fletcher headed straight at City keeper Hart from Ryan Giggs' cross - and the seemingly ageless Old Trafford veteran was instrumental when they took the lead four minutes before the interval.
Rooney challenged for Van der Sar's clearance and Giggs pounced to deliver an inviting pass for Nani, who escape the attentions of Pablo Zabaleta to slide a composed finish past Hart.
City boss Mancini, who watched his team fail to capitalise on so much early possession, made a change early in the second half when he replaced Aleksandar Kolarov with Shaun Wright-Phillips.
And in an attempt to actually call Van der Sar into serious action, something City had failed to do, he then introduced Dzeko for James Milner.
The impact was exactly what City required as both substitutes were involved when they drew level after 65 minutes. Wright-Phillips' cross fell to Dzeko and his effort took a vital touch of Silva's back to wrong-foot Van der Sar.
Ferguson immediately introduced Berbatov for Anderson, but it was that moment of brilliance from Rooney that put them back in front and visibly deflated City.
City were stunned at being struck by such a blow and their threat fizzled out as Old Trafford buzzed with excitement at what had unfolded. United survived in comfort to close out a crucial victory.