Manchester City's title hopes suffered a setback despite a rousing comeback in their home draw against Sunderland as Aston Villa were undone by Chelsea in front of the watching Stiliyan Petrov.
QPR and Wigan claimed vital victories over Arsenal and Stoke, respectively, to increase the tension in the relegation scrap at the bottom of the table, with Wolves now marooned after yet another defeat at the hands of Bolton
Everton moved above Liverpool, temporarily at least, with a comfortable home success against West Brom, while Fulham scored twice in the opening 13 minutes to set up their victory over Norwich.
Manchester City hit back from 3-1 down to draw 3-3 with Sunderland, but have still handed the title initiative to rivals Manchester United, who can now move five points clear with victory away to Blackburn on Monday.
Seb Larsson set the ball rolling with a cool finish from the edge of the box and although the home side levelled through Balotelli's penalty, City switched off before the break to allow Nicklas Bendtner to head home Stephane Sessegnon's cross at the far post.
Sessegnon then released the Dane to burst into acres of space 10 minutes into the second period and he rolled the ball across the six-yard box for Larsson to slot home beyond Joe Hart with Kolo Toure all at sea.
Balotelli pulled City back into the contest with a superb strike seven minutes from time before Aleksandar Kolarov drilled home from outside the area just 60 seconds later to set up a dramatic finale, but City could not find a winner and dropped their first points of the season at the Etihad Stadium.
Aston Villa mounted a stirring comeback against Chelsea but eventually slipped to a 4-2 defeat little more than 24 hours after it was announced captain Petrov had been diagnosed with acute leukaemia.
The Bulgarian attended the match before starting treatment in a London hospital on Monday, with tributes from home and away players and supporters before, during and after the match.
Daniel Sturridge and Branislav Ivanovic put the visitors in control only for the home side to hit back with a quick-fire brace to restore parity courtesy of goals from Eric Lichaj and James Collins.
But thoughts of an emotional victory were immediately dashed as Ivanovic converted his second of the game from Juan Mata's corner before Fernando Torres made sure of the victory for Roberto di Matteo with a cool finish beyond Shay Given.
Wolves' fading hopes of avoiding relegation are disappearing with every passing defeat as fellow strugglers Bolton claimed all three points in an enthralling contest at Molineux.
The home side dominated proceedings in the first half but could not make the breakthrough until Michael Kightly cut in from the flank and unleashed a low shot beyond Adam Bogdan's despairing dive.
Martin Petrov showed great composure to send Wayne Hennessey the wrong way from the penalty spot after Roger Johnson brought down Mark Davies, with the midfielder unveiling a T-Shirt which read 'Be Strong Stan' in support of fellow countryman Stiliyan Petrov.
Marcos Alonso was in the right place to convert after David N'Gog's header came back off the bar in the 80th minute before experienced campaigner Kevin Davies stepped off the bench to make it 3-1.
Matt Jarvis pulled one back for Terry Connor's men in the 88th minute but there was to be no leveller and Wolves are now six points adrift of safety and with a significantly worse goal difference after a run of five successive defeats.
Wigan remain in the relegation zone despite their first home victory since August as Stoke were beaten 2-0 at the DW Stadium.
Antolin Alcaraz powered a header home from eight yards out in the 54th minute after Jean Beausejour, who missed glorious chances in either half, produced an excellent cross from the left.
Victor Moses then added a second with time running out with a great solo effort to give Roberto Martinez's men hope of producing another great escape after their heroics of last season.
Arsenal's seven-game winning run was brought to a juddering halt by Queens Park Rangers at Loftus Road with Samba Diakite netting the all-important winner in the 66th minute.
Adel Taarabt's superb turn and finish had given the home side the lead before Theo Walcott levelled, with the England international reacting quickly to convert after his own shot had come back off the post.
Defeat for the Gunners reopens the race for third in the Premier League, with Tottenham now just three points adrift ahead of their home meeting with Swansea and Chelsea only two further back.
Everton moved above local rivals Liverpool, temporarily at least with the Reds tackling Newcastle on Sunday at St James' Park, with a 2-0 home success against West Brom.
Leon Osman's shot in the 18th minute was deflected home by Gareth McAuley after neat one-two with Nikica Jelavic, with the Baggies defender credited with an own goal.
And super-sub Victor Anichebe added the second just six minutes after coming on with a delightful first-time finish from outside the box after being set up by Steven Pienaar.
Two early goals at Craven Cottage set Fulham on their way to a 2-1 success against Norwich, with Clint Dempsey on target in only the second minute after John Ruddy could not hold Bryan Ruiz's shot.
The American then turned provider as his superb through-ball was fired home first time by Damien Duff with Ruddy getting his hands to the ball but unable to keep it out.
Substitute Aaron Wilbraham pulled one back 13 minutes from time but Paul Lambert's men were unable to find a late leveller.