Fabio Capello’s men cruised through the bulk of the first half and found themselves two up after half an hour thanks to goals from Ashley Young and Darren Bent.
But a lapse in concentration in England’s back-line allowed Elsad Zverotic to pull one back for the home side seconds before the break.
Wayne Rooney was then shown a straight red card mid-way through the second half after losing his cool and kicking out at Miodrag Dzudovic from behind.
And with Montenegro in the ascendency, Andrija Delibasic nodded home a late equaliser for Branko Brnovic’s men to seal a Group G play-off spot.
England had dominated the first half and signalled their intent early on when Phil Jones forced a save from Montenegro goalkeeper Mladen Bozovic within two minutes after the Manchester United defender embarked on a buccaneering run down the right wing.
And the visitors took the lead after just 10 minutes through Young, who calmly nodded home Theo Walcott’s inch-perfect cross from the right as he lurked at the far-post.
England’s front-line continued to trouble a shaky Montenegro rearguard throughout the opening exchanges and Capello’s men doubled their lead after 32 minutes.
Rooney fed Young, who burst towards goal and slid a perfectly-weighted ball across for his former Aston Villa team-mate Bent to tap home and round off a flowing England attack.
It was impressive stuff from England, and the visitors looked to be well on their way to winning Group G in style in Podgorica.
However, Montenegro were able to halve England’s advantage moments before the half-time whistle when Zverotic capitalised on a moment of miscommunication between John Terry and Gary Cahill to fire home from close range.
Montenegro appeared to be galvanised by their breakthrough late in the first half and started the second on the front foot.
The home side had what looked to be a legitimate claim for a penalty waved away by referee Wolfgang Stark five minutes after the re-start when Jones appeared to trip Stevan Jovetic in the box.
Rooney, whose temperament continues to be called into question, then saw red for the second time in an England shirt for a reckless kick out at Dzudovic from behind after miscontrolling the ball.
Montenegro, now further inspired thanks to their their one-man advantage, streamed forward as England continued to struggle in the second half.
And the home side snatched what was an inevitable equaliser in stoppage time when Savic floated in a beautiful cross to the far post over Joe Hart for Delibasic to thump his header home.
The final whistle sparked wild scenes of jubilation as home fans streamed onto the pitch to celebrate a play-off spot with the players.
The group winners were a little more restrained. They knew it couldâ€”and shouldâ€”have been three points.
Montenegro: Mladen Bozovic,Vladimir Bozovic (Delibasic 79), Savic, Djudovic, Zverotic, Beciraj (Damjanovic 64),Pekovic, Vukcevic,Kascelan (Jovanovic 46), Jovetic, Vucinic.
England: Hart, Jones, Terry, Cahill, Cole, Walcott (Welbeck 76), Barry, Parker, Young (Downing 60), Bent (Lampard 64), Rooney.
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