City took the lead through schoolboy Manny Richardson after 55 minutes - his first goal at under-18 level - only for the Eagles to draw level with 15 minutes left through substitute Jack Randall.
With less than 60 seconds left, City were denied a penalty when Richardson saw a shot blocked on the line and, with the City bench still appealing, Palace broke and James Dayton had the simplest of tasks to score.
City Line-Up: Rudd (Steer, 85 min), Cooper, Yong, Lathrope, Ferrell (Miller, 56 min), Danny Kelly, Adeyemi, Smith, Daley, Richardson, Davey.
Subs (not used): Holmes, Stephens, Dawkin.
Crystal Palace Line-Up: Thorp, Abnett, Clynne, Conley, Edwards (Pinney, 70 min), Dalhouse, Djlali, Adelarun, Kudoji, Dayton, Noble (Randall, 52 min).
Subs (not used): Sweeney, Charles, Cadolan.
- City Under-16s lost 2-0 to Palace at Colney.
