Both teams started brightly enough with things being fairly even in the opening ten minutes, although Blackpool won two quick corners early on.
But City deservedly took an early lead when a clever knockdown from Ryan France found Stuart Green about ten yards out and he did well to control and shoot as the Blackpool defence stood and watched him.
Four minutes later Stuart Elliott robbed a defender 30 yards out and sent a perfect pass to Danny Allsopp who shot inches wide with only the keeper to beat although by his high standards he should have done much better.
After 23 minutes Allsopp exploited poor defending by Mike Flynn, who lost the ball in a central position 25 yards out, but Lee Jones somehow flung out his left arm acrobatically to parry the effort.
In the 28th minute, a lack of concentration in City's box led to Martin Bullock setting up Scott Vernon who was six yards out, but the striker skied his shot over.
Nick Barmby, who was injured early in the game, found he could not continue and was replaced by Jon Walters. Seconds later Green forced another good save from Jones after he looked certain to score.
After the half-hour mark, Walters headed over after a period of neat passing by City, especially France, who had an impressive game on the right.
But, out of the blue, Scott Taylor stunned City with an unstoppable left-foot volley after Marc Joseph had failed to clear. For all their efforts City appeared stunned that they had surrendered their lead.
Blackpool restarted the game boosted by the fact that they were still in with a chance and City did indeed look a bit shaken in the first few minutes of the second half.
But in the 58th minute Blackpool's poor defence let them down again as the ball fell to Elliott 20 yards out and he hammered his shot home decisively. The game petered out after that but there was one bright spot for City when Walters saw a shot well-saved after a good one-two with Jason Price.
But Blackpool reminded City they were still in the game when Taylor was allowed to shoot in the area only to be denied by an excellent reflex save from Boaz Myhill in the 76th minute.
Michael Flynn also tried his luck as the Tangerines won three corners in quick succession.
City seemed to be showing considerable complacency, and they had to endure a nervous last few minutes as Blackpool piled on the pressure. But in the dying moments, Walters skewed a shot over from an excellent position and France shot wide, but the final whistle will have brought much relief to City.