The first half failed to excite, as many had predicted, as the game meandered along at a slow pace.
Spurs were comfortable in possession without creating any notable opportunities while Sergio Aguero wasted City's best chance of the opening 45 minutes.
The Argentine was played in by Micah Richards, who had dispossessed Scott Parker in the Spurs half but sent his shot straight at Brad Friedel.
David Silva also went close to giving Roberto Mancini's side the lead but his shot across goal went wide of the post.
The game then exploded into life with an incredible spell of four goals in ten second-half minutes.
City took the lead courtesy of former Arsenal man Samir Nasri, who applied a composed first-time finish to Silva's perfectly timed through pass.
Moments later the Citizens were 2-0 up after Joleon Lescott bundled the ball over the line following Edin Dzeko's flick on.
Within minutes however Spurs were level courtesy of a quickfire double of their own.
With the game seemingly heading for a draw, Ledley King brought down Balotelli in the box four minutes into added time.
The controversial Italian stepped up to convert the spot-kick and send City eight points clear of Spurs in the Premier League table.