Blues started brightly and on three minutes Carl Motteram's good run down the left flank ended with the Blues winger firing over the bar from 18 yards out.
Five minutes later Julian Gray had a good opportunity. Skipper for the night Darren Anderton won the ball in the centre of the park and found Andrew Barrowman on the edge of the box. His flick-on found Gray but his left foot volley went high and wide.
On ten minutes the home side took the lead. A Djordjic corner was met in the box by Louis Saha and his header towards goal was met by centre back Mark Howard who headed home past Ian Bennett from two yards out.
Blues came close to levelling matters just two minutes after United's goal. The influential Anderton found Barrowman with a pin-point pass and the centre-fowards first time effort was just parried out by United keeper Ricardo.
Just a minute later Blues did equalise and what a goal it was. Gray picked the ball up wide left and weaved past three United defenders into the box. With everyone expecting the cross Gray hit the ball with the outside of his left foot past the helpless Ricardo.
Dave Jones went close for United on 17 minutes - his powerful shot from twenty yards out was tipped over by Bennett.
On twenty-one minutes Blues defender Marcos Painter was booked for a late tackle on United winger Chris Eagles.
Two minutes later Blues really should have taken the lead. Birley's right-wing cross was met by the totally ummarked Gray but with just Ricardo to beat his weak right foot effort sailed past the post.
United took the lead for the second time on 25 minutes. Saha was fouled by Anderton twenty yards from goal and David Bellion stepped up to fire the resulting free kick past Bennett.
More goalscoring opportunities came before the break, which was interrupted for two minutes when about twenty Man Utd fans came from behind Benno's goal onto the pitch in protest of the proposed takeover by Malcolm Glazer at Old Trafford.
Motteram mis-kicked from six yards out, Alsop shot straight at Ricardo when well positioned and Sam Oji had a left foot shot easily dealt with by the United keeper whilst at the other end Keiron Richardson and Dave Jones had efforts blocked by the Blues rearguard.
The second half took a while to spark into life but on 58 minutes Saha hit a post with a left foot effort from twenty five yards out with Bennett beaten.
Blues drew level for a second time on the hour mark. Painter planting a header past Ricardo from an Anderton corner.
Anderton became the second Blues player to go into the referee's notebook on 65 minutes for a late tackle.
Barrowman had a chance to put Blues ahead on 67 minutes but his shot from just inside the box was blocked whilst at the other end a good run into the box by the lively Saha was well defended by Tiny Taylor.
Blues went 3-2 up with just seven minutes remaining and the goal was not disimilar to the Blues second goal. Full back Painter scoring his second of the night with a close range effort after an Anderton corner was flicked on by substitute Asa Hall.
United looked to have levelled matters on 87 minutes but Rossi's point-blank header went straight into Bennetts arms.
The Reds pressed hard in the final minutes but Blues held on to inflict a first defeat of the season on Ricky Sbragia's side.
Man Utd: Ricardo, N'Galula, Spector (Poole, 77), Howard, McShane, Eagles, Jones, Djordjic, Richardson, Bellion, Saha (Rossi, 72).
Blues: Bennett, Blake, Painter, Oji (Hall, 63), Taylor, Alsop, Birley (Howland, 89), Anderton, Barrowman, Gray, Motterham.
Referee: Jimmy Tattan.