Manchester United missed the chance to start the New Year on top of the Premier League after suffering a 3-2 defeat to Blackburn as Arsenal went fourth after Chelsea crashed 3-1 at home to Aston Villa.
With Manchester United manager Sir Alex Ferguson celebrating his 70th birthday at Old Trafford, the stage was set for United to open up a three-point lead against crisis-hit bottom club Rovers.
But an 80th-minute winner from Grant Hanley settled a pulsating game in Rovers' favour after two goals from Dimitar Berbatov had helped United fight back from 2-0 down after Ayegbeni Yakubu's double for Blackburn.
"It is a disappointment," said Ferguson. "I never expected it. We lost two terrible goals and you can't do that."
The defeat means league leaders Manchester City can go three points clear of United if they defeat Sunderland on Sunday.
Blackburn manager Steve Kean -- who has faced months of abuse from Rovers fans seeking his dismissal -- meanwhile said he hoped the win would bring the club's supporters together.
"I hope, in time, the fans who have been negative will turn as well and be with us and make a real intimidating atmosphere at Ewood Park," Kean said.
"If the players carry on playing without fear, as we did today, we will climb the table."
A disastrous afternoon for Chelsea saw Aston Villa come from behind to score a stunning 3-1 win at Stamford Bridge.
Didier Drogba shot Chelsea ahead from the penalty spot on 28 minutes after being brought down in the area by Richard Dunne.
But Villa silenced the home crowd just five minutes later when Stephen Ireland rifled home a rebound after his first effort had cannoned off John Terry on the Chelsea goal-line.
And two goals in the final seven minutes from Stiliyan Petrov and Darren Bent handed Aston Villa victory as boos rang out around the ground following a fourth game without a win.
"I thought in the end we deserved it. We looked very dangerous on the break," Villa boss Alex McLeish said.
Chelsea manager Andre Villas-Boas was meanwhile happy to draw a line under 2011. "Hopefully 2012 brings us better results," Villas-Boas said.
"We need to improve on a couple of aspects and we know what they are. Villa punished us well in the final stages of the game."
Arsenal were the main beneficiaries of Chelsea's loss, Robin van Persie bagging his 35th Premier League goal of 2011 as Arsenal downed QPR 1-0 at the Emirates to move into fourth spot.
Van Persie's 60th-minute winner saw him finish just one goal away from Alan Shearer's calendar goalscoring record of 36.
Wenger meanwhile paid tribute to the way his team fought their way into contention for a top four finish after a disastrous start to the season.
"I give credit to these players, they have been 17th and 18th in the league and no-one talked, they just focused and there is formidable spirit," he said.
Arsenal's win also saw them gain ground on third placed Tottenham, who had to settle for a 1-1 draw at Swansea after Scott Sinclair's late goal for the Welsh club cancelled out Rafael van der Vaart's opener for Spurs.
A bruising encounter at the Britannia Stadium saw 10-man Wigan snatch a 2-2 draw with Stoke, Ben Watson scoring with his first touch from the penalty spot to give the Latics a share of the points.
Wigan took the lead against the run of play shortly before half-time, Victor Moses getting on the end of a Hugo Rodallega cross to put the visitors 1-0 up.
But Jonathan Walters scored from the penalty spot to level when Gary Caldwell was sent off before Cameron Jerome made it 2-1 to Stoke. Substitute Watson made it 2-2 three minutes from time after Ryan Shotton fouled Rodallega.
Elsewhere, Norwich came from behind to draw 1-1 with Fulham at Carrow Road, Simeon Jackson scoring deep into stoppage time for the Canaries after Orlando Sa had given the Cottagers a 1-0 lead.
Meanwhile Bolton slipped to the bottom of the table after Wolves fought back to snatch a 1-1 draw at the Reebok Stadium.
Sam Ricketts scored a superb opener for Wanderers on 22 minutes, curling a shot into the top corner from 25 yards to mark his return from a 10 month injury lay-off in style.
But Steven Fletcher nodded in the equaliser for Wolves just after half-time following a pinpoint Matt Jarvis cross to secure a point for the visitors.