Substitue Felix Nmecha's 89th minute winner was enough to see us edge past the Reds and move eight points clear at the top of the table.
But Liverpool were quickest out of the traps in the second half and capitalised on a defensive lapse in concentration to level the scores soon after the restart.
With the game finely poised, Nmecha plucked a high ball out of the air and poked an effort underneath the onrushing Jakub Ojrzynski to secure us all three points.
With second-placed Blackburn slipping up against Everton, Enzo Maresca's side need two wins from our last four matches to guarantee a first Premier League 2 title.
Relive the best of the action with a CITY+ subscription.
All five of our EDS' remaining Premier League 2 games will be broadcast live on CITY+, meaning you can follow every minute of the title race.
CITY+ provides unrivalled access to new and exclusive City content, including full-match replays and CityTV documentaries and features and, after the free 30-day trial, the subscription costs just £1.99GBP / month.
If you sign up on Friday 9 April, you will be able to watch the EDS' final five fixtures during the trial period:
- Liverpool (H) – Friday 9 April, 19:00.
- Manchester Utd (H) – Friday 16 April, 19:00.
- West Ham (A) – Friday 23 April, 16:00.
- Tottenham Hotspur (H) – Friday 30 April, 16:00.
- Tottenham Hotspur (A) – Friday 7 May, 17:00.