Manchester City have missed the chance to extend their lead at the top of the Premier League after they slumped to defeat against a Marko Arnautovic-inspired Stoke City.

The Potters were ahead inside seven minutes as Xherdan Shaqiri crossed from the by-line and Arnautovic beat Nicolas Otamendi to the ball and scored.

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Manuel Pellegrini's men tried to find an instant response as Kevin De Bruyne fired a side-footed shot towards goal, but was unable to find a way past Stoke keeper Jack Butland.

However, another incisive pass from the tricky Shaqiri put Arnautovic one on one with Joe Hart, who returned to the starting lineup after recovering from injury. The England international was left helpless as the former Inter Milan forward calmly stroked the ball into the bottom corner.

The Austrian continued to torment the Citizens' backline, which looked to be missing the influence of club captain Vincent Kompany and he almost completed his hat-trick as he fired narrowly wide of the target.

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City almost pulled one back with the interval approaching as Aleksandar Kolarov's strike was stopped by the combination of Butland's boot and his near post.

The woodwork was rattled again within seconds, but it was the Blues who nearly conceded a third as Arnautovic's effort had the beating of Hart, only to bounce back off the frame of the goal.

Pellegrini's side needed to start the second half well. However, they almost conceded within minutes of the restart as Bojan Krkic was denied by Hart.

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On 71 minutes, Arnautovic got himself into an advanced position on the left side of the area and fired a menacing pass across the face of goal, which Shaqiri could not divert into the net.

Things got worse for the league leaders, who have not come from two goals behind to win since beating Norwich City in 2005, as Fernando limped off with a hamstring problem with Pellegrini having already used all his substitutes.

Even with 10 men, the visitors tried to find a late comeback as Fabian Delph struck a shot from distance, but his effort was a timid one as Butland collected comfortably and Stoke held on to move into ninth place.