Yohan Cabaye's goal just after the hour gave Newcastle their first victory at Old Trafford since 1972 and consigned United to back-to-back home defeats in the league for the first time since May 2002.
Having lost 1-0 to Everton on Wednesday, United have now lost as many games as they did in the whole of last season's title-winning campaign and David Moyes's side could fall 15 points behind leaders Arsenal before the weekend is out.
"I'm disappointed with the result," Moyes told BT Sport. "I think there were bits of the game where we needed a bit of luck to go for us and to take our opportunities a bit better, and that didn't happen."
However, the United manager refused to admit defeat in his side's title defence, saying: "I stand firm that we'll be very close to it and I hope we're in and around it when it comes to the end of the season."
United restored Robin van Persie to their starting line-up following a four-game absence with a groin strain, but the closest they came to scoring was a Patrice Evra header that hit the post early in the second half.
Newcastle hit the champions with a sucker-punch in the 61st minute, with Moussa Sissoko galloping down the right flank after winning a duel with Evra before cutting the ball back for Cabaye to sweep home.
The dominant team of the Premier League era, United remain rooted in ninth place in the table, 12 points below Arsenal, while Newcastle are now only three points off the UEFA Champions League positions in seventh.
United's misery was tempered slightly after both Chelsea and Manchester City dropped points, but it means that Arsenal could stretch their lead to seven points if they win at home to Everton on Sunday.
Jose Mourinho's side were on course for a point after Andre Schurrle claimed a brace either side of goals from Peter Crouch and Stephen Ireland, only for Assaidi to cut in from the left and dispatch a glorious decisive strike at the death.
City fell one place to fourth, five points behind Arsenal, after drawing 1-1 at Southampton.
Sergio Aguero gave City a tenth-minute lead by dispatching a low cross from Aleksandar Kolarov, but Dani Osvaldo produced a stylish equaliser shortly before the interval, slipping past Vincent Kompany and Pablo Zabaleta before curling home.
Liverpool capitalised on Chelsea and City's slip-ups to steal into second place -- above Chelsea on goal difference -- by winning 4-1 at home to West Ham United in a game that featured three own goals.
A Guy Demel own goal put the hosts in front in the 42nd minute and they stretched their lead early in the second half through Mamadou Sakho, before Liverpool centre-back Martin Skrtel put through his own goal.
Luis Suarez headed in his 14th goal of the season in the 81st minute, with a Joey O'Brien own goal completing the scoring after West Ham captain Kevin Nolan had been sent off for an ugly foul on Jordan Henderson.
"It was a difficult game. West Ham are a committed side," Liverpool manager Brendan Rodgers said.
"We started slowly, but once we got the goal, it allowed us to flow better. In the end we had 29 attempts at goal, and we could have scored more than four. It was a great victory."
Having won 2-1 at Fulham on Wednesday, Spurs prevailed through a close-range Paulinho strike and a John O'Shea own goal at the Stadium of Light after Adam Johnson had exploited a Hugo Lloris error to put Sunderland ahead.
Goals from Cameron Jerome and Marouane Chamakh saw third-bottom Crystal Palace close to the brink of safety with a 2-0 success at home to Cardiff City, while Gary Hooper and Leroy Fer scored to give Norwich City a 2-0 win at West Bromwich Albion.