In an entertaining, open encounter, both teams could have had more goals and perhaps a penalty or two in a match that you couldn’t take your eyes off.
James Milner put the Reds ahead from the spot just after half-time but Sergio Aguero levelled mid-way through the second period with his 25th goal of the season.
Ultimately, it’s two points dropped for the Blues who are now 12 points adrift of leaders Chelsea.
What happened?
City began the game with the intention of getting the midweek defeat to Monaco out of their system as quickly as possible.
CLOSE CALL: David Silva causes havoc in the Liverpool defence
Some of the early passing interchanges were breath-taking with, inevitably, David Silva at the heart of everything.
Raheem Sterling and Leroy Sane were lively on either flank and the visitors survived with some last-ditch defending at times.
The first moment of controversy came on 15 minutes when Sergio Aguero appeared to be impeded as he lunged to meet Sterling’s low cross, but the referee wasn’t interested.
Then Silva came within a whisker of scoring five minutes later as he powered a loose ball inches wide after Sane’s cross was only half-cleared.
At the other end, Sadio Mane broke clear and was denied by Willy Caballero who would end the half the busier of the two keepers.
MIDDLE MARCH: Kevin De Bruyne runs at the Liverpool back line
Then City were denied what looked a clear penalty as Sterling looked set to tap in Sane’s low cross but James Milner’s challenge saw the ball cleared rather than nestling in the back of the net – but again the officials saw no foul.
The home support were on their feet again five minutes before half-time as Kevin De Bruyne played Silva into the box and his low cross squirmed across the six-yard box to Fernandinho at the far post but the Brazilian could only shoot into the side netting with the goal at his mercy.
Liverpool ended the half strongly as first Firmino saw a curling shot beaten away by the Argentine and then Adam Lallana saw a powerful volley pushed over by the City keeper.
The deadlock was broken five minutes after the re-start but it went to the visitors.
The Blues were slow at clearing their lines and as Firmino chased a chipped pass he was clumsily challenged by Gael Clichy and the referee pointed to the spot where Milner made no mistake.
OLD PALS AXE: Liverpool old boy Raheem Sterling runs at the visitors defence
It looked like it could be another afternoon of frustration as the half wore on until, finally, the Blues drew level.
The ball fell to De Bruyne on the right flank and the Belgian wasted no time in whipping a superb low cross into the six-yard box for Aguero to sweep home.
On the overall balance of play it was no more than City deserved, but with 20 minutes still to play it set up a frantic finale.
The Blues came close to taking the lead when Aguero battled into the box before the ball worked its way to De Bruyne who struck the outside of the post with Simon Mignolet stranded.
Then Sterling came within inches of lobbing ball over Mignolet as he raced into the box only to see the ball bounce inches wide.
It was breathless stuff as Liverpool then broke clear and as Firmino squared for Lallana, the England midfielder somehow failed to connect cleanly for one of the misses of the season with an open goal gaping.
NO ENTRY: Nicolas Otamendi challenges Saido Mane
There were more half-chances as both teams went for the win, but perhaps a draw was the fairest result on the day.
What it means…
City stay third, two points behind Spurs and 12 points behind Chelsea.
The Blues are five points ahead of fifth-place Manchester United who have played one game less.
City Matchday App Star man: Willy Caballero
What’s next?
City have a fortnight before the next fixture as most the squad head off for international duty.
Pep Guardiola will need his troops to return as fresh and rested as possible with Arsenal and Chelsea on the agenda immediately after the break.
