PSG slumped to their second loss of the campaign after a Jean Calve goal four minutes into the second period handed them an embarrassing reverse and left them top only by a solitary goal from Montpellier, who had kept the heat on Saturday with a 1-0 win over a Marseille side going down to their first loss in two months.
Both the leading pair have 30 points from their 14 matches to date.
Antoine Kombouare's Parisians huffed and puffed against Nancy, who began the day in the drop zone, but produced no end product as they went down to their first defeat in 12 matches.
Kombouare said he had had little to say afterwards to the players.
"I will watch it again and debrief the players tomorrow - you have to avoid saying things in the heat of the moment which you will regret later (but) we lacked aggression up front."
PSG's Brazilian sporting director Leonardo said: "It's a loss but we are still top. Now we have an important week with Marseille to face - there is much to do."
Leonardo insisted the club hierarchy were behind Kombouare.
But French media have been awash with speculation linking luminaries such as David Beckham - on the playing side - and Carlo Ancelotti on the coaching side with PSG, and on the basis of Sunday's showing they desperately need inspiration from somewhere.
Argentine starlet Javier Pastore ran into several cul-de-sacs as he vainly tried to spark what should have been a home banker win on paper, while his teammates appeared not to be on the same wavelength.
Calve had not netted all season for Nancy and an early contribution was a booking for a foul on the busy Pastore.
But he did the northeasterners proud with a fine drive which arrowed past home keeper Salvatore Sirigu after taking a pass from Lossemy Karaboue.
PSG left the field to booing from frustrated home fans who have been keeping their fingers crossed that with the likes of Marseille and Bordeaux in the doldrums their massive summer Qatari cash boost that has financed team rebuilding will not prove to be a false dawn.
Montpellier, who have never won the title, thanked a Marseille man as they ensured they stayed right in the hunt after Souleymane Diawara headed into his own net under pressure.
Montellier lost 3-0 at home to PSG earlier in the season but coach Rene Girard says they can stay the course.
"We didn't play our best tonight but we were solid and got the three points so we continue on our adventure," said Girard after the club's best ever start to a campaign.
Meanwhile, Saint Etienne, whose glory days were back in the 1970s with the likes of Michel Platini leading the charge, scored a 2-0 win at eight-man Nice which propelled Les Verts into the top half of the table.
Nice saw their six-match unbeaten run come to an emphatic end as they had Colombian keeper David Ospina, Eric Mouloungui and Renato Civelli dismissed.
The visitors thanked a penalty from former Liverpool fringe player Florent Sinama-Pongolle and a first career goal for young defender Kurt Zouma as they moved up to eighth.
On Friday, reigning champions Lille and fellow title hopefuls Lyon lost ground - Lyon bowing 2-1 at home to Rennes while Lille drew 0-0 at Toulouse after Moussa Sow missed a penalty, those outcomes both a boon to PSG.
Lille are five points behind PSG and Lyon trail the leaders by seven points.
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