Liverpool forward Dirk Kuyt's hat-trick dealt a body blow to Manchester United's English Premier League title hopes as the leaders were beaten 3-1 at Anfield on Sunday.
United suffered their second league defeat in a week after losing 2-1 at Chelsea on Tuesday, leaving them just three points ahead of Arsenal having played a game more.
Kuyt opened the scoring after 34 minutes from point-blank range after some trickery by Luis Suarez and the workaholic Dutchman doubled Liverpool's lead five minutes later after a terrible mistake by the unfortunate Nani.
Kuyt put the game beyond United midway through the second half, again with a simple finish, after keeper Edwin van der Sar failed to hold a curling Suarez free kick.
United substitute Javier Hernandez scored a consolation in stoppage time.
United have 60 points from 29 games. Arsenal have 57 from 28 with third-placed Manchester City on 53 from 29. Liverpool are sixth on 42 points.
Liverpool's dreadful early-season long since ended their own hopes of a title challenge but, after a stirring rendition of their anthem, set about trying to put a spanner in the works of United's charge towards a record 19th English title.
Uruguayan Suarez, a deadline day signing who plays very much in the image of Liverpool manager Kenny Dalglish, was clearly determined to make an immediate impact on his first taste of the biggest derby in English football.
He buzzed around from the start and had an early half chance as Liverpool set a high tempo.
However, United's more measured approach gradually got them into the game and Dimitar Berbatov came closest to opening the scoring with a shot that clipped the woodwork.
An absorbing contest played in bright sunshine caught fire as halftime approached.
Suarez unlocked United's makeshift defence with an audacious dribble past Rafael, Michael Carrick and Wes Brown before scuffing the ball across goal for Kuyt who swept the ball into the net for one of the easiest goals of his career.
United were rattled and worse was to follow five minutes later when Nani's misdirected defensive header went back across his own area and fell perfectly for Kuyt who doubled Liverpool's lead with a simple header.
Jamie Carragher was fortunate to escape a red card for an ugly challenge on the left shin of Nani which ended the Portuguese winger's involvement in the game and as tempers frayed Rafael was booked along with Martin Skrtel after the Brazilian's wild tackle sparked a flare-up.
Berbatov almost got United back into the game on the hour with a header blocked on the line by Raul Meireles but there was little fluency about the visitors who have now lost their last three league visits to their arch rivals.
Any hopes of a United comeback ended after 65 minutes when Kuyt struck again before the Anfield faithful were given their first sight of club record signing Andy Carroll in a Liverpool shirt -- the striker getting a late taste of the action when he replaced Meireles to huge applause.
United did at least break through in added time, Hernandez heading in from close range.