After top-six rivals Arsenal and Manchester United dropped points on Saturday, second-placed Tottenham took full advantage as Harry Kane struck twice in a 3-2 home win against Everton.
That left Tottenham seven points behind Chelsea who face West Ham United on Monday, while City are a further point behind Tottenham with a game in hand after goals by Sergio Aguero and Leroy Sane eased them to a 2-0 win at Sunderland who stay rooted to the bottom of the table.
City are three points above fourth-placed Liverpool while Arsenal have slipped out of the top-four after their 3-1 loss at Anfield on Saturday. United are sixth, three points worse off than Liverpool, after drawing with Bournemouth on Saturday.
Tottenham, as they did for most of last season when they pursued title winners Leicester City into the closing weeks, look like they are ready to go the distance again.
Kane opened the scoring in the 20th minute with a 25-metre rocket shot and doubled his side's advantage early in the second half -- his 19th league goal of the season and 14th strike in 12 games in all competitions.
Romelu Lukaku, vying for the Premier League's Golden Boot with Kane, struck his 18th of the season with 10 minutes left before Dele Alli struck for Spurs in stoppage time and Enner Valencia replied immediately for the visitors.
Tottenham have now won nine consecutive home Premier League games for the first time while Everton's nine-match unbeaten run in the league came to an end.
"It was a fantastic performance even if we are a little disappointed to concede the goals," Spurs manager Mauricio Pochettino said. "We dominated the game and played with a lot of confidence.
"It's important because now comes the most important period in the season."
City, who have the chance to move second when they play at home to Stoke City on Wednesday, were in third gear at times against Sunderland but had far too much class.
It took them until three minutes before the break to edge ahead. A sweeping move saw David Silva release Raheem Sterling whose cross was dinked home by Aguero.
Silva was involved in City's second -- a perfectly-weighted pass allowing Sane to smash a shot past Jordan Pickford.
City have kept five successive away clean sheets in all competitions and have 10 away league wins, although Guardiola was still not totally satisfied.
"It was a good victory," he said. "But we were passing the ball between ourselves in the last 25 minutes.
"I don't like to defend a result and be near our box. It is okay if you're 3-0 or 4-0 up but not 2-0."
(Editing by Pritha Sarkar)
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