Victory for Brendan Rodgers’ side would have seen them return to the top of the Premier League table, while three points for City would move us to within one point of the summit.
Everything pointed towards a fascinating encounter at the Etihad, which saw the visitors draw first blood when Phillippe Coutinho tapped into an empty net after Raheem Sterling had rounded Joe Hart.
But City regrouped and were level within six minutes when Vincent Kompany rose highest to head home from a corner.
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Manuel Pellegrini's men continued to turn the screw, and Alvaro Negredo wrapped up the points in first half stoppage time.
Picked out by Jesus Navas, the Spaniard's lofted effort squirmed through the palms of Liverpool goalkeeper Simon Mignolet and into the net to complete the turnaround.
Both sides had chances to add to their tally, with an early Navas header clipping the woodwork, while Sterling also blazed over from a promising position in the second 45.
It proved a vital victory for City against a side we would pip to the title by two points the following May.
