The young Magpies trailed at the half-hour mark in their Group E encounter at Glanford Park following Frankie Maguire's opener for the Blades before Lewis Miley's close-range header, the 16-year-old's first goal at under-21 level, drew the visitors level on the stroke of half-time.

The hosts, however, restored their lead through Owen Hampson's close-range finish before Newcastle's youngsters were unable to salvage a equaliser in the final stages after a number of key goalscoring opportunities.

Elliott Dickman made one change from their recent Premier League Cup clash - a 1-0 home defeat against Crystal Palace - as  Matt Bondswell, who featured for the Magpies' first-team during pre-season friendlies against Benfica, Atalanta and Athletic Club, replaced Jordan Hackett at left-back.

After a quiet opening in front of goal for both sides, Newcastle fell behind in the 29th minute as James Huntley's intended pass to goalkeeper Jude Smith lacked enough pace, with Maguire pouncing on the error before slotting the ball past the Scottish teenager.

Newcastle's youngsters almost responded in quick fashion as Dylan Stephenson, United's top goalscorer so far this term with five in all competitions, squandered a goalscoring opportunity as the 19-year-old forward fired an effort from the edge of the box over the crossbar.

Miley, who signed a scholarship with United's academy last summer, went close to equalising as the Stanley-born youngster, younger brother of Magpies midfielder Jamie, controlled Jay Turner-Cooke's pass before drilling a powerful attempt over the bar.

In the fourth minute of additional time, Newcastle equalised through Miley's maiden strike at second-string level. After Alex Murphy guided Turner-Cooke's inviting free-kick towards goal, Miley was on hand to deftly head the ball home from inside the six-yard area.

Smith, who joined the Magpies from Scottish League Two side East Fife in August, produced a key stop to deny Billy Blacker in the second-half as the former Celtic youth product parried away the Blades forward's header before collecting the loose ball.

In the 71st minute, Sheffield United restored their one-goal cushion as Blacker's dangerous cross from the right flank found Hampson inside the penalty area, who lifted the ball into the roof of the net.

Miley continued to remain United's main attacking threat throughout the cup contest as the 16-year-old saw a low shot from the edge of the box held by Sheffield goalkeeper Callum Hiddleston.

Isaac Westendorf, who joined the Magpies in January following a successful trial for United's second-string, went close to levelling in the final minutes as the Bremen-born forward latched onto a loose ball inside the box before his drilled shot was saved by Hiddleston.

Substitute Josh Scott almost rescued a point for the young Magpies as the Gateshead-born winger fired an audacious effort from distance, forcing Hiddleston into turning the ball away from danger.

Newcastle United Under-21s: Jude Smith, Harry Barclay, Niall Brookwell, Alex Murphy (c), Matt Bondswell, James Huntley (Amadou Diallo 80), Jay Turner-Cooke, Joe White, Dylan Stephenson (Josh Scott 66), Lewis Miley, Isaac Westendorf.

Subs not used: Charlie Wiggett, Will Brown, Jamie Miley.