Arsenal returned to the top of the Premiership thanks to Michael Tarnat's own goal and a Thierry Henry thunderbolt.
Their 2-1 win puts them two points ahead of Manchester United and six clear of Chelsea.
The Gunners remain unbeaten in 23 Premiership games this season.
The game erupted in the last minute after Nicolas Anelka chested down a pass to shoot City's goal.
He clashed with Ashley Cole as he tried to retrieve the ball from the net. Cole was booked for trying to stop him. Anelka was sent off for violent conduct.
Arsenal boss Arsene Wenger said: "I saw some pushing and shoving and the referee was very close to the incident." Arsenal skipper Ray Parlour said: "It was a tough game. City closed the space down very well. It was a great goal by Thierry. We had to hang on but it was very important that we got three points." City came to frustrate Arsenal with a five-man midfield. Claudio Reyna, Joey Barton and Paul Bosvelt tried to lock up the central area. Anelka was left as a lone striker but Kevin Keegan's plan survived until the 39th minute.
City claimed that Anelka had been fouled by Gilberto Silva but referee Alan Wiley let play continue.
Parlour found Dennis Bergkamp and he picked out Henry whose cross was turned in by the stretching Tarnat, under pressure from Freddie Ljungberg.
Henry had earlier missed a great chance, turning Lauren's centre against an upright from five yards.
Torrential rain made passing very hard in the second half and handling was difficult for the keepers.
But Jens Lehmann was in sound form. He held Sun Jihai's long shot, then made a fine diving save to keep out Sylvain Distin's close-range header and saved at the near post from Robbie Fowler too.
Arsenal's record signing, £17million Jose Antonio Reyes from Sevilla, made his debut as a 70th-minute sub for Bergkamp.
He quickly showed his quality with a quicksilver turn to set up Robert Pires for a blocked shot.
City keeper David James then saved low from Reyes and Henry.
Henry settled the contest seven minutes from time. There seemed little danger as he shot from the left edge of the box.
Instead his 25-yard effort curled like a rocket beyond James. Then came Anelka's goal and red card.