England forward Raheem Sterling scored the decisive goal in the last minute of normal time – latching on to goalkeeper Ederson’s long kick and coolly slotting home.

The Premier League champions had come into the match as strong favourites and went in front on 18 minutes through Sergio Aguero.

But the game swung in Schalke’s favour before half-time after a contentious VAR decision and two Nabil Bentaleb penalties.

The first of Schalke’s spot-kicks came after the intervention of the VAR, who penalised City defender Nicolas Otamendi for handball when the ball struck his arm as he moved it behind his back.

The second was given for a foul by Fernandinho on Salif Sane – the referee sticking with his decision after briefly consulting the VAR.

After being booked for the handball, Otamendi was shown a second yellow card for a foul on Guido Burgstaller in the second half – meaning he will sit out the second leg, as will Fernandinho.

With City heading for a surprise defeat, manager Pep Guardiola sent on former Schalke player Leroy Sane – and the Germany international curled home a free-kick from 30 yards out to level, before Sterling struck.

“It was a great result,” said Guardiola. “We gave them two penalties, we gave them a red card, and in this competition that is not too good.

“We are still not ready to fight for the latter stages, that is reality, but the result is good.

“We played with incredible personality. We gave two goals when they did absolutely nothing. It is not over, this competition is completely different.”

The second leg takes place in Manchester on Tuesday, 12 March.

Questions were asked about City when they lost 2-1 at Newcastle in late January, but five successive victories later and talk has turned to whether they can win an unprecedented quadruple of trophies this season.

While Phil Foden believes they can “definitely” win all four, fellow midfielder Kevin de Bruyne has suggested it would be “nearly impossible” and Guardiola said it was “silly” to be asked the question in February.

City top the Premier League on goal difference – albeit having played a game more than Liverpool – and will face Swansea in the FA Cup quarter-finals.

Their first chance of silverware comes in the Carabao Cup final against Chelsea on Sunday, but four days before that their Champions League campaign looked to be stalling.

City dominated the opening half an hour – with 70% possession – and Aguero’s goal came via a gift from goalkeeper Ralf Fahrmann, whose pass sold defender Sane short as David Silva nipped in and laid the ball off for his team-mate to finish.

Guardiola’s side showed their resolve, though, by scoring twice late on and will now be heavy favourites to progress to the last eight.

Sane said: “I was a little bit sad for Schalke, because the atmosphere was amazing like it always is. Schalke did really well, the way they defended made it difficult.

“At the end we did it, we scored three goals away – that was the most important thing. You can see the will is a lot. We never give up, we always want to keep fighting.”

‘I don’t know what is handball and what isn’t’

The hosts trailed 1-0 when wing-back Daniel Caligiuri cut in from the right and struck a shot goalwards, which hit Otamendi on the arm.

It seemed as though the Argentine was trying to tuck his arm behind his back, and Spanish referee Carlos del Cerro Grande initially awarded a corner. But after consultation with VAR Alejandro Hernandez – a discussion which took nearly three minutes – he pointed to the penalty spot, and former Tottenham midfielder Bentaleb converted.

It later emerged the pitchside monitor used to review decisions was broken, so the referee could not watch a replay of the incident.

Former City defender Danny Mills said on BBC Radio 5 live: “I don’t know what is handball and what isn’t any more. Otamendi is trying to get his arm out of the way, it’s in a natural position, but it stops the ball hitting the target.”

Ex-City midfielder Michael Brown added: “It was probably the longest VAR in history deciding the right decision. I don’t think they knew and then finally they gave the penalty.”

The second penalty decision was more straightforward for the referee as he penalised Fernandinho for holding – and Bentaleb scored once more.

Schalke head coach Domenico Tedesco said: “We are obviously very disappointed by the result. We deserved more.

“For one of the few times this season we had a bit of luck on our side. We knew we would be pushed deep, but we were sloppy too often on the counter and conceding the goals we did late on was heartbreaking.”

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City needed victory to be confirmed as champions but Paul Pogba scored two goals in two minutes to overturn City’s first-half lead before Chris Smalling’s volley completed the dramatic turnaround.

Pep Guardiola’s side had delivered a first-half masterclass with captain Vincent Kompany scoring with a thumping header after 25 minutes and Ilkay Gudogan adding a second five minutes later after a clever turn and finish.

Outclassed United remained in contention after Raheem Sterling skied two golden chances over the bar with the goal at his mercy and Gundogan headed straight at keeper David de Gea when unmarked eight yards out.

It gave United hope and how Jose Mourinho’s team responded as Pogba – out of sorts at Old Trafford recently and at the centre of claims by Guardiola before the game that he had been offered to City in January – stole in to pull a goal back after 53 minutes and head the equaliser two minutes later.

The remarkable turnaround was complete when Smalling, badly at fault for Kompany’s goal, arrived unmarked to steer Alexis Sanchez’s free-kick past the exposed Ederson in the 69th minute.

In a furious finale, players from both sides clashed and Ashley Young was fortunate that his wild lunge on City substitute Sergio Aguero in the area was ignored by referee Martin Atkinson.

De Gea made a world-class one-handed save from Aguero as City attacked furiously – but United held out and Guardiola’s title party must wait for another day.

City will win the title next weekend if they beat Tottenham at Wembley on the Saturday (19:45 BST kick-off) and United lose at home to bottom club West Brom on Sunday (16:00).

When Gundogan turned sweetly and poked a right-foot finish beyond De Gea after half an hour, the champagne was being placed on ice by Manchester City’s supporters – and on the evidence up to that point no-one could blame them.

City were tearing United’s fragile defence apart and Gundogan’s goal was a fitting return for domination that had already brought them the lead through Kompany’s header.

It was hard to see how the visitors, so passive and pedestrian, could do anything other than mount a damage-limitation exercise before City’s title celebrations got under way.

And then came what proved to be the decisive passage of play when Sterling sent two easy chances wildly over the top and Gundogan provided a tame headed finish to another great opportunity.

It left the door ajar for United – and they burst through it once manager Jose Mourinho had delivered his half-time message.

When Pogba slipped through eight minutes after the interval to beat Ederson and give United hope, the defensive demons that put the skids under City in the Champions League quarter-final first leg at Liverpool on Wednesday surfaced once more.

Nicolas Otamendi, so solid and improved before that 3-0 loss, lost Pogba in the area as he headed home to restore parity in the space of two minutes, and City’s defenders were once again caught off-guard when Smalling was left totally unmarked to turn in Alexis Sanchez’s free-kick after 69 minutes.

City were stunned – flaws exposed. Pep Guardiola’s side conceded three in 19 minutes at Anfield and three in 16 minutes here. Lightning had struck twice in the space of four days.

It was only the brilliance of De Gea, with a world-class save from substitute Aguero, that stopped City rescuing the respectability of a point – but there was a serious sense of anti-climax around the Etihad at the final whistle.

City felt they were on the wrong end of several decisions from referee Martin Atkinson, particularly when Young clearly followed through on Aguero in the area in the second half, but they only have themselves to blame after the failure to take those first half chances and that second-half defensive collapse.

Indeed, one City supporter – and not a child either – was in tears in his seat in the stand. He will cheer up when the title formalities are complete, but this was a bitter pill to swallow for Guardiola, his team and their fans.

Pogba’s first-half performance aroused comment for two reasons – the manner in which he was outmanoeuvred in midfield and a hair colour that looked suspiciously like an unwitting title tribute to Manchester City with its flashes of blue.

The man Guardiola claimed was offered to Manchester City in January was as off the pace as his team-mates and social media would not have made pleasant reading for the France playmaker.

But how it all turned in the space of two minutes early in the second half as the tall, long-striding Pogba flipped the game on its head and opened up the possibility of a United victory that seemed light years away at half-time.

And what resolve Mourinho’s side showed to dig their way out of the hole they found themselves in after 45 minutes, stirring themselves for a comeback that will at least give them pride that they did not allow City to have their title celebration at their expense.

True, they rode their luck as Young somehow escaped punishment for that reckless challenge on Aguero in the area, but they scrapped it out and relished the feisty later exchanges when City’s discipline deserted them.

This will not stop City winning the title but it will give United a real sense of satisfaction in a season where they have been comprehensively overshadowed by their neighbours.

Liverpool, who come to the Etihad protecting that 3-0 lead in the Champions League quarter-final second leg on Tuesday, will have watched events unfolding here with mixed emotions.

In the first half, City looked every inch a side with the capability to overturn that deficit as they dazzled in attack and left United chasing shadows in midfield.

In the second, they looked like a team who would be easy prey for Liverpool’s goalscoring triumvirate of Sadio Mane, Roberto Firmino and, if fit, Mohamed Salah.

City’s performance was two-faced and Guardiola will know that just one piece of the frailty they have demonstrated in conceding six goals in their past two games will be fatal against the Reds’ potent attack.

Guardiola will also know City must sustain the level of the first half for 90 minutes and eradicate the errors of the second or their Champions League campaign will be over.

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The visitors dominated the first half and deservedly led when David Silva hooked in from a corner just before the break after Romelu Lukaku headed the ball into the Spain midfielder’s path.

Marcus Rashford levelled in first-half stoppage time, sharply slotting in as Nicolas Otamendi and Fabian Delph sloppily failed to deal with a cross.

But Otamendi put City in front again after the restart, acrobatically volleying past David de Gea when Lukaku’s poor attempted clearance rebounded off Chris Smalling’s back.

City keeper Ederson made a tremendous double save to deny Lukaku and Juan Mata late on, shortly after Ander Herrera was booked for diving following a challenge from Otamendi in the penalty area.

Pep Guardiola’s side become the first team to win 14 successive Premier League games in a single season, also levelling Arsenal’s outright top-flight record, set between between February and August 2002.

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