Related articleCup heartbreak as young guns impressThe Blues, led by coach Simon Davies, were edged out 2-1 against Tottenham Hotspur at White Hart Lane in their fourth round tie.
Lloyd Ellams had put Chester 1-0 ahead after 28 minutes following a pass from striker Paul McManus.
Tottenham levelled matters eight minutes before the break when Danny Rose netted, and David Hutton sealed City's fate when he converted a penalty three minutes from time after Paul Dorman was adjudged to have fouled Rose.
City, who had already dispatched three teams prior to last night, were aiming to repeat their 1-0 victory against Spurs at The Deva Stadium in the third round of the same competition last season.
On that occasion a Paul McManus goal was all that separated the sides and it was McManus who had an involvement in putting the young Blues in the lead in north London.
Just before the half hour, McManus crossed a ball from the left which Ellams got on the end of to knock it in from six yards.
City then had to weather some pressure from the home side as Spurs created a number of chances in which they could have evened the scoreline.
The equaliser arrived for the hosts eight minutes before the break when Rose scored at the back post.
Three minutes after the interval, Spurs were aggrieved not have been awarded a spot kick. Yuri Berchiche had a spirited run down the left wing and crossed the ball to David Hutton who headed the ball goalwards, but Gio Feliciello blocked the ball and Spurs' penalty claims were rejected.
Spurs nearly took the lead in the 57th minute after a bold attempt by Danny Hutchings.
Feliciello countered with a 63rd minute free kick which the Spurs keeper tipped over his bar, and City keeper, Dorman, denied Ryan Mason's long range effort six minutes later.
With five minutes to go, City put Spurs on the defensive again when McManus attempted to feed a ball to Ellams who failed to connect.
Spurs clinched victory three minutes from time when Hutton converted a penalty after Dorman had been accused of bringing down Rose.
City provided a good account of themselves and produced another good advert for youth development at Chester.
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