Paul Dummett's late strike rescued a point for Newcastle as Manchester United missed the chance to go level on points with fourth-placed Tottenham.
It was a remarkable end to a game that had seen the away side lead twice.
Wayne Rooney's penalty and Jesse Lingard's finish put them 2-0 up before Georginio Wijnaldum and Aleksandar Mitrovic's penalty levelled the scores.
Rooney's second looked to have won it for Louis van Gaal's side but Dummett salvaged the draw in the last minute.
The point earned is not enough to lift Newcastle out of the bottom three - they remain a point and place behind 17th-placed Swansea - but it represents another notable improvement following three successive 1-0 league defeats.
For Louis van Gaal's side, it will represent two points lost and a step backwards after back-to-back Premier League and FA Cup victories had offered improvement on a winless December.
Following criticism of Manchester United's attacking prowess, in a season that had seen them score just 24 goals in 20 league games prior to Tuesday, Van Gaal himself admitted on Monday that he has been "very bored" at times watching his side.
He can have no such complaints after this hugely entertaining, see-saw game, which produced some of their best attacking play of the season.
Rooney was magnificent.
The England striker gave them the lead from the spot after Mike Dean's controversial call to award a penalty against Chancel Mbemba after his arm blocked Marouane Fellaini's back-post header from a corner.
But it was his role in setting up Lingard for the second - holding the ball up before rolling a perfectly timed pass into the winger's path for a low, angled finish - and his superbly struck 20-yard second, after Memphis Depay's shot had deflected to him, that really showcased the 30-year-old's talent.
Ultimately, though, Van Gaal will be left bemoaning an area in which his side have largely excelled this season, as a series of defensive lapses cost them victory
This game screamed dull like a toddler who drops an ice-cream after one lick. Neither side has been playing well, both have struggled to score goals and nobody expected them to offer anything different after a gruelling schedule
With both managers under pressure, it promised to be a tight, cagey affair with little to entertain a live television audience. But this is the season of shocks and instead of drab, we were given a thriller, full of drama, wonderful individual performances, controversial decisions and some spectacular goals. It is a contender for game of the season and befitting of the tremendously entertaining United teams of years gone by.
It sounds like Paul Scholes doesn't really mind if United lose games as long as they entertain him. It would be great to see how Scholes might get on as a manager - he's spent most of this season slagging off Van Gaal's tactics and how boring the team has been. Now they've dropped two points to relegation candidates - let's not forget that this is what has happened - he sounds almost pleased that at least some players ran down the wing.
Managers Reactions:
Steve McClaren has said that having watched the replay of that opening penalty the decision was "ridiculous" and that it was Mbemba's momentum that put his hand where it was. Hmmm.
"I think we deserved the point. Boring United? They weren't boring.
"Building and growing, fighting for 90 minutes and tonight we got the rewards.
"People are questioning [the player's effort] and the players have come through showing fantastic character - especially Coloccini."
Mr Van Gaal looks absolutely furious and a bit sad at the same time. Sort of like when you lose a cup final in the last minute on Football Manager.
"I think it was a duel - I've seen the video and you see Mitrovic is pushing with the hand, the head of Smalling. You cannot decide which is the most worse I think, but the referee is not losing the game for us.
"When you want to avoid a hazard of Fellaini - your hands to the ball? I do not think is ball to the hands, it is hands to the ball. I do not think it is a discussion.
"I think also we were unlucky. When you see where the ball is going [Dummett's last minute equaliser] it is going into the hands of De Gea. Before that we are running behind and you have to push forwards, you have to push the ball under pressure, and then you get these kinds of things.
"They have to finish of course but it's always difficult. Rooney had also a very big chance in the first half. We could have made here six goals I think. There were big possibilities so when you lose two points it's very sad and everybody knows it is our own fault.
"Now we have given two points away. It is a big game for Man Utd and for Liverpool but now I am still with my mind with this game and yeh... that is not so happy ending."
