Goals either side of half-time from Paul Stalteri (43 minutes) and Michael Carrick (49 minutes) put us in the driving seat at 2-0 after we'd created a number of chances in a very open first half - James most notably saving from Robbie Keane and Jermaine Jenas.
But no sooner had we netted that crucial second goal then City were back in it with Georgios Samaras steering home Slyvain Distin's long throw just two minutes later.
That certainly switched the pressure switch back on but in truth, although City got into a few decent positions, Paul Robinson was only called into serious action once - brilliantly tipping aside Albert Riera's 30-yarder at full stretch.
At the other end, James excelled again to keep out Anthony Gardner's low drive and tip a deflected cross onto the post. Thankfully, there were few late scares this time.
"In the first half we did well but didn't score more, that was the only problem - but if it wasn't for David James we would have scored four or five goals," reflected Head Coach Martin at the Lane.
"James was terrific, especially in the first half. I think we missed one or two chances and he made some marvellous saves. It was exciting stuff.
"We went up 2-0 but then conceded a soft goal again and that's a bit of a problem.
"You have two options then - you can attack and try to score the third or fourth goals or try to protect the lead and that's when you can get twisted minds and that's what you don't want, you drop off and get all the pressure.
"In the end it was a great result and I think we thoroughly deserved the win."
Martin Jol felt we 'made it difficult for ourselves' against Manchester City - but was well aware that David James denied us a much more convincing victory on Saturday.