كتب : Hatem Maher
Kaka's goal in the stoppage time narrowed the gap to only one goal as nerves flared in the added five minutes that witnessed two scoring attempts for Milan.
Inter looked on their way to a historic victory as they went to the lockers room with a two-goal lead through Hernan Crespo and Dejan Stankovic.
Zlatan Ibrahimovic seemed to put the game beyond all doubt with a third goal for Roberto Mancini's men shortly after the interval.
Clarence Seedorf pulled one back for the hosts but Marco Materazzi netted Inter's fourth as the Nerazzurri took a commanding lead.
However, late goals from Alberto Gilardino and Kaka sparked Carlo Ancelotti's side back to life but there were no enough time to complete their dream recovery.
The result maintains Inter position on top of the league table with 21 points while Milan lie in 12th place with seven points.
Kakha Kaladze almost put Milan in front after just one minute when he latched on to Andrea Pirlo's free-kick from the right flank at the far post with the goal at his mercy, but his shot went poorly wide.
Four minutes later, Inter full-back Fabio Grosso crossed the ball to Patrick Vieira, whose first-timer hit Massimo Ambrosini's hand but the referee waved the play on.
Argentina international Crespo grabbed the lead for Inter in the 17th minute after he towered to head Dejan Stankovic's free-kick into the right bottom corner of the net.
Serbian midfielder Stankovic extended the gap five minutes later when he collected Olivier Dacourt's pass and fired a thunderous shot into the left top corner from the edge of the area.
Milan coach Carlo Ancelotti made his three substitutions during halftime, introducing veteran defender Paolo Maldini, Alberto Gilardino and Ricardo Oliveira in a bid to revive Rossoneri hopes.
But it was Inter who scored to deepen Milan's misery two minutes after re-start, with Ibrahimovic scoring from a by-the-book counter attack.
Stankovic darted through Milan's midfield before feeding the onrushing Swede, who flicked the ball over Alessandro Nesta and sent a right-footed volley that struck Dida's body and went into the net.
Milan opened their account in the 50th minute when Seedorf after his shot took a massive deflection off Inter skipper Javier Zanetti to send Julio Cesar the wrong way.
But Materazzi looked to have ended Milan's hopes after he added the fourth eight minutes past the hour mark.
Milan's terrible mistakes in set-pieces continued after the unmarked Italian international connected with Stankovic's free-kick to head home.
He was sent-off right after the goal as he received a second booking for pulling his shirt over his head during celebration.
Gilardino notched his first goal of the season in the 75th minute with a glancing header past Cesar after being set-up by Brazilian right-back Cafu.
Milan narrowed the gap furtherer in stoppage time after Cesar cleared Cafu's cross into the path of Kaka, who superbly lobbed the ball into the unguarded net.