Patrice Evra's left-wing cross was headed past Shay Given by veteran Scholes with less than a minute of the allotted three minutes of added time to play.
Referee Martin Atkinson, who had taken charge of the reverse fixture at Old Trafford last September and controversially played over six minutes of added time when only four were indicated by fourth official Alan Wiley, was a late replacement for Steve Bennett after Bennett found himself marooned in Romania at a referee's conference after the Icelandic volcanic eruption disrupted European air traffic.
Dimitar Berbatov, Nani, Federico Macheda, Rio Ferdinand, and John O'Shea missed out for United, while Evra, Johnny Evans, Darron Gibson, and Darren Fletcher all came in, along with Wayne Rooney.
Antonio Valencia was the chief architect of several United chances as he seemed to have the beating of Wayne Bridge, who was himself returning from a lay-off after a hernia operation.
Two late chances laid on by Valencia were wasted by first Rooney and then Giggs as City failed to take control of midfield and their three forwards, including an overawed Adam Johnson, rarely tested Edwin Van der Sar and failed to profit from the possession they had.
United didn't seem to be missing the injured Rio Ferdinand, while City's best first-half chance came from a Carlos Tevez free-kick which forced Van der Sar into an acrobatic save as it sailed towards the top corner.
Second-half chances for Bellamy and Nigel De Jong went to waste as City tried to raise their game, but a pair of gilt-edged chances for Nedum Onuoha and Tevez during a goalmouth scramble six minutes from time were repelled by Nemanja Vidic within the six-yard area.
Meanwhile Bridge could only force a comfortable save in the closing minutes before Scholes struck the hammer blow.
(GSM) - Sir Alex Ferguson was full of praise for Paul Scholes as the latter scored a fine header to give Manchester United a victory against city-rivals Manchester City. With this slender win, United have managed to keep their Premier League title hopes alive at Eastlands.
The veteran midfielder scored in the third minute of injury time to grab a dramatic 1-0 victory in the Manchester derby. And Ferguson realizes that a draw would have been a blow for United's title bd.
He told Sky Sports, "It would have been very, very difficult if we had not won.
"I think we deserved to win the match, no question, but I couldn't see a goal coming.
"I decided to put Scholes a bit further forward and it paid off.
"He was man of the match today, he was wonderful, he's such a skilful player."
(GSM) - Roberto Mancini was "angry" following his side's heartbreaking last-minute defeat at the hands of Manchester United at Eastlands. Paul Scholes scored a header deep into injury time to end the match 1-0 in favor of United.
The result keeps United very much in the title race, right behind league leaders Chelsea. Meanwhile Mancini's City could lose their Champions League position if Tottenham beat the Blues later today.
After the derby defeat, Mancini spoke with Sky Sports about his disappointment and anger.
"That's football, it's incredible, but for us it doesn't change anything, we have another four games.
"We are very disappointed to lose and I'm very angry but always positive.
"We had some chances and we didn't deserve to lose but that's football.
"We played a good game but it was difficult for us and United, and when Scholes scored in the last few seconds it was unlucky.
"This doesn't change the situation for fourth place - the crucial match will be against Tottenham here."
MANCHESTER, England (AFP) - Paul Scholes's 93rd-minute winner settled the Manchester derby at Eastlands on Saturday to give Manchester United a 1-0 victory that kept their title dream alive.
The veteran midfielder rose to meet Patrice Evra?s left-wing cross with 20 seconds remaining of the three minutes of added time and his clinical 12-yard header may yet prove costly for Manchester City as they seek fourth place and a first ever taste of Champions League football.
United manager Sir Alex Ferguson admitted defeat would have all but ended his side's hopes of a fourth straight title, although leaders Chelsea will remain four points clear with three matches to play if they beat Tottenham Hotspur later on Saturday.
"It (losing) would have made it very difficult," Ferguson told Sky Sports.
"We deserved to win the game but I couldn't see a goal coming. Towards the end, City made a bit of a charge, it got a bit open, the game, and I decided to push Scholesy forward a bit and it paid off.
"I think he was the man of the match," Ferguson added. "I thought he was absolutely fantastic."
Defeat meant City missed the chance to put distance between themselves and Tottenham, their rivals for the fourth-place finish that guarantees a spot in the qualifying rounds for next season's Champions League.
"We are very disappointed, we didn't deserve to lose," said frustrated City manager Roberto Mancini. "But this is football."
The former Italy forward added: "The crucial match will be against Tottenham here (on May 5). We have four games left and we must try to win them."
The derby's importance was not lost on both teams, which perhaps explained the slightly cautious first half, particularly from City, who defended extremely deep in an effort to stifle United.
The best chances of that opening period both fell to United and came in the final five minutes.
First, Antonio Valencia's intelligent header into the area wrong-footed the defence and found Wayne Rooney, only for the forward to smash his shot past the post from 15 yards.
Then, with half-time beckoning, Valencia again beat the recalled Wayne Bridge far too easily down the United right and delivered a low, driven near-post cross that Ryan Giggs poked tamely into the hands of Shay Given.
Those openings aside, first-half opportunities were sparse, with Edwin van der Sar required to make the only save of note when he leapt high to his right in the 12th minute to catch a direct Carlos Tevez free-kick, awarded 25 yards from goal after a foul on the Argentine striker by Darron Gibson.
Rooney, who was passed fit after recovering from the effects of his ankle injury, cut an increasingly frustrated figure.
He frequently argued with referee Martin Atkinson, a controversial late call-up to officiate the game because of his role in the first Manchester derby of the season, in which Michael Owen scored the winning goal in United's 4-3 victory after six minutes of injury time.
Craig Bellamy wasted a glorious chance on the counter for City, taking a Tevez pass in his stride only to hurry his shot into the side-netting.
At the other end, Giggs was similarly profligate with a wasteful first-time volley from an accurate Valencia cross.
But Mancini had seen enough and sent on defensive midfielder Patrick Vieira for Adam Johnson.
Finally the contest began to open up and Evra, substitute Nani and Giggs all had half-chances for United while Gareth Barry and Nigel de Jong threatened the United goal -- all in a five-minute period.
United substitute Dimitar Berbatov, on for Rooney, headed inches wide of Given's covering dive from a Gary Neville cross nine minutes from time.
Then van der Sar mishandled a corner, sparking a furious late scramble in which Vieira and Nedum Onuoha had shots blocked.
(GSM) - Manchester United boss Sir Alex Ferguson is sweating over the fitness of three key players as he prepares to take on Manchester City in a crucial clash at Eastlands.
Wayne Rooney has been touted for a return to action this weekend but the boss said on Friday, "Wayne has done some work in the last couple of days and we're going to assess how he does today [in training] to see how he is for Saturday's game.”
"The big problem is that all the players want to play. But we have to be 100 per cent sure that Wayne is ready."
Rio Ferdinand and Ryan Giggs are also rated doubtful for the game, "The same applies for Ryan and Rio, although they are both behind Wayne in terms of the work they have done.”
"Picking up injuries in last Sunday's game is a problem in terms of recovery time, but at least they have done some jogging. I have to consider them if they manage to do something today (Friday). But it's up in the air at the moment."
On a more positive note, Owen Hargreaves is in the travelling squad after training well on Thursday, while John O'Shea has made a good recovery after coming off at Ewood Park with a slight injury last Sunday.
"I think with John it was just tiredness after his first start in quite a while. Other than that everyone is fit."
Whoever is passed fit and selected by Sir Alex will be under no illusions about the importance of Saturday's match, it being the first of United's last four league games with a four-point gap to close on Chelsea.
"It's a pivotal week of the season for four teams - ourselves, Manchester City, Chelsea and Spurs,"
"Being selfish, we obviously hope that we and Spurs both win,” Scot tactician added.
MANCHESTER (AFP) - Alex Ferguson confirmed on Friday that Wayne Rooney could return from injury in Manchester United's derby clash at Manchester City on Saturday.
Rooney missed last weekend's draw at Blackburn after aggravating an ankle problem in the second leg of United's Champions League quarter-final against Bayern Munich.
The England striker hadn't been expected to feature against Bayern as he had missed the previous match against Chelsea with the injury, but Ferguson gambled on his fitness, only to see his star player suffer another setback.
However, Rooney has returned to training this week and Ferguson admitted the 24-year-old will be in the squad to face City if he suffers no reaction.
"He has done some work over the last couple of days and we will see how he is for Saturday's game," said Ferguson, who also confirmed Ryan Giggs and Rio Ferdinand have an outside chance of being involved at Eastlands.
Reports in England on Friday claimed Rooney will be the target of a big-money bid from Real Madrid in the close-season as the Spanish club look to reunite the striker with former United team-mate Cristiano Ronaldo, who moved to the Bernabeu last year.
It has been suggested United would find it hard to turn down a substantial offer for Rooney as they have amassed huge debts under the ownership of the Glazer family.
But Ferguson was quick to brush off the reports. "It is the silly season isn't it," he said. "It always happens at the end of the season. Wayne Rooney will still be here next year."
Ferguson was more interested in focusing on Saturday's crucial clash with City as the champions try to keep their title hopes alive.
United are four points behind leaders Chelsea with four games to play, while City are firmly in the hunt for a top-four finish and the Champions League place that comes with it.
"It is the most significant derby for a long time," Ferguson said. "City and Spurs are trying to get into the Champions League for the first time in their history.
"It is the first time since I have been manager that we are facing City when they have a genuine chance of achieving something."
Ferguson was also boosted by the news that England midfielder Owen Hargreaves is set to be included for the City game, giving him the chance to make his first senior appearance in almost 20 months after a series of knee operations.