Mancini had appeared to suggest that Balotelli's City career was finished after the Italian striker was sent off in last weekend's 1-0 defeat at Arsenal.
Balotelli has repeatedly tested Mancini's patience with a series of increasingly bizarre incidents, including setting fire to his own bathroom by letting off fireworks and on-pitch rows with team-mates.
The pair have clashed on several occasions, but on Friday Mancini appeared to make a peace offering to Balotelli as he suggested he could still work with the former Inter Milan forward if he showed a willingness to change his ways.
"I'm happy if he wants to stay. But if he stays I think he needs to change," Mancini said.
"If he changes manager tomorrow, next year or in three years time then it's important he changes his behaviour. He can lose all his quality if he doesn't."
Mancini will have to do without Balotelli for Saturday's trip to Norwich as the striker is suspended following his Arsenal red card.
And Mancini believes the Carrow Road clash represents an even more severe test to City's title hopes than their forthcoming clash with leaders Manchester United.
City can move within two points of United, who host Aston Villa on Sunday, if they beat Norwich, but Mancini said: "United is easy. We could lose or we could win but it is an easy game. Against United or Chelsea, our concentration will be 100 per cent.
"But Norwich will be really tough because we have only had two days to recover after West Brom.
Meanwhile, Mancini appeared to have his tongue firmly in his cheek as he agreed with Manchester United assistant coach Rene Meulensteen's claims that City do not have the right attitude to win the title.
Meulensteen was quoted on Friday as saying that City, five points behind leaders United with five games remaining, do not have a well-balanced team -- only individuals who play for themselves.
"I agree," said Mancini when asked for a response to Meulensteen's alleged comments.
"For these reasons we cannot win (the title). They (United) have the experience, a fantastic team, they have everything.
"We don't have anything. They are perfect and we are the opposite."
Mancini then offered a more realistic assessment of his team, saying: "I am proud of my players for everything and we make mistakes because we are normal. We are not on the moon.
"We are normal and like all normal people we can make mistakes. They (United) are fantastic. They have won everything for 20 years but we are here.
"Every man can make a mistake every day. We are like this."
Mancini also hit out at UEFA after European football's governing body this week fined City £24,740 for being one minute late back on to the pitch -- around £8,000 more than Porto were charged for their fans directing racist abuse at Balotelli and Yaya Toure a month later.
UEFA shocked City by deeming their time-keeping against Sporting Lisbon in the Europa League last month worse than the monkey chants which marred the Porto game in the same competition.
"UEFA is like all the countries that need some money at this moment," added Mancini.
"Italy needs money, Germany needs money. UEFA will be the same!"
Source: AFP
Source: AFP