After taking the lead Brian Tinnion's play-off hopefuls were outplayed after the break by a revitalized Blackpool side who overran their midfield.
The visitors were inches away from a win as the game moved into injury time with Keigan Parker slamming a free-kick against the bar with keeper Steve Phillips beaten.
City, looking for a third win in eight days, went badly off the boil after Steve Brooker had put them ahead.
Both keepers were forced into making good early saves as Phillips in City's goal turned a 25-yard blast from Parker onto the bar for a corner and then Blackpool's Lee Jones lined up well to gather a snap free-kick from Mickey Bell.
Parker and Jamie Burns were causing problems for City's defence and really came into their own after the break, but in the first half the home side saw more of the ball and their aggression put them ahead midway through the half.
David Cotterill, at 17 the youngest on the pitch, forced a corner out of Jones and Blackpool failed to clear cleanly. From the edge of the box Tony Dinning knocked the ball forward and on the bounce Brooker turned a glancing header wide of the keeper.
Not the greatest or tidiest of goals but it gave City's confidence an edge and they could have easily scored again.
Luke Wilkshire released Leroy Lita on a solo run which carried him clear but a wayward shot found the side netting.
It was not a good day for the England under-21 striker who was replaced just after the hour.
His miss began to look expensive when Blackpool grabbed their equaliser on the hour through Richie Wellens.
An unnecessary corner conceded by Dinning saw a Peter Clarke booted off the line by Bell. The ball stayed around the penalty area and, with the defence in disarray, Wellens closed in from the left to score from five yards.