An affirmation of who really holds the cards at the top of the Premier League. The team is Manchester City, who take a stride towards the top, rather than Liverpool, whose slip to fourth reveals that leading the race at Christmas does not carry quite the same comforts as usual in this incredibly fluid season.

But the scoreline made the night no less a statement of intent from the players Brendan Rodgers sent out. Some very strong squads have been taken apart at this stadium in the past four months but Liverpool’s performance was materially better than any other seen here from a visiting side.

There have not been many occasions before this when we could say that City needed the resilience of Fernandinho and the goalkeeping of Joe Hart to preserve their 100 per cent Premier League home record. Manuel Pellegrini, their manager, punched the night air and his Etihad superiors will doubtless have nodded, knowingly. Rodgers is a manager who seriously impresses them.

At times in the first half, the football was as enervating as anything we had seen in City’s dismantling of Arsenal two weeks ago, though written through with none of the same inequality. Rodgers sent out a team that looked and played like they actually believed they could stand toe-to-toe with the most powerful side in the Premier League. So although City quickly came at their weakened and vulnerable right flank like a battering ram, with Aly Cissokho up against Jesus Navas – a match made in Manchester heaven – Liverpool were not cast aside.

There were certainly some ominous moments for them in the early stages, with Navas racing ahead of Cissokho to head a cross against the top of Simon Mignolet’s right-hand post: the third attack down that flank in the first 10 minutes. But Liverpool looked the sharper team, brimful with incision and imagination in the 30 minutes before half time. Luis Suarez was at the axis of some wonderful creation in the final third, Philippe Coutinho and Raheem Sterling combining with him intricately, and you only had to cast your mind back to the Liverpool we saw last Boxing Day night – dismally defeated at Stoke – to know how far they have come in a year.

Sterling found himself dancing around Joe Hart to fire the ball in the net just before the 20-minute mark, after a finely timed and weighted through pass by Suarez. Though he had manifestly beaten City’s offside trap, referee Lee Mason’s linesman didn’t see it that way, so there was a form of justice about the way he helped put Liverpool ahead after another move of liquid football five minutes later. Suarez’s deft touch created it again – spinning Jordan Henderson’s pass into the path of Sterling, who rounded Hart once more and allowed Coutinho, positioned beside him, to pick up the script to send the ball into the net from an acute angle.

The problem for Rodgers, though, was that his defence was not equipped to withstand the way that City came back at Liverpool. City counter-attack with a power which makes concession of the ball to them a danger anywhere on the field and the standard of defending which allowed City to equalise was dismal. It was a repeat of their well-known vulnerability to the set-piece which allowed their opponents back into the game. Vincent Kompany jockeyed in front of Martin Skrtel – for whom this was a generally good night – to deposit David Silva’s corner past Mignolet, who might have done better, and Joe Allen, who failed to clear from the line.

Liverpool might have gone back ahead, as the football was played back and forth with incredible intensity. Another beautiful interlinking move concluded with Sterling levering a ball into the area for Suarez to lay off for Coutinho, whose shot Hart leaped sharply to his left to save. But then City counter-attacked in all of their finery – box to box, five players involved, with Nasri’s clipped long ball the best component and Negredo the beneficiary. The Spaniard’s early clipped shot seemed to surprise Mignolet, who put a weak glove on it but could not prevent it looping over him into the net. He should have done better.

It was measure of what Liverpool were offering that a City whose manager says they will always attack tightened up a little after the interval, with Fernandinho reducing the threat of being caught on the break.

Yet it was hardly a defensive outlook. The tally of 28 shots on goal after 75 minutes showed what kind of game this was. But Suarez was subjected to some unsophisticated handling from Lescott at times and though he launched a theatrical late dive under the defender’s challenge to seek a penalty, his shirt was being pulled at the time. Suarez was unfortunate to be booked for hurtling into Hart as he chased a late ball at the end but his greater frustration was felt for the way the clearest goalscoring opportunity of the second half – carved out by him – was squandered.

His low, whipped cross – delivered behind Kompany and Lescott – reached Sterling with a pace which was too much for him. The 19-year-old put the ball over the bar from five yards and his gesture when he left the field soon later – his shirt lifted over his face – revealed a teenager who knew the significance of that miss. Liverpool’s challenging Christmas continues at Chelsea on Sunday but they will travel without fear.

Match facts

Manchester City: Hart 7/10, Kompany 7, Toure 6, Fernandinho 8, Zabaleta 6, Lescott 5, Kolarov 5, Silva 7, Nasri 7, Navas 6, Negredo 6

Liverpool: Mignolet 5, Johnson 6, Sakho 5, Skrtel 7, Cissokho 5, Allen 6, Lucas 6, Henderson 7, Coutinho 6, Sterling 7, Suarez 8

Goals. Manchester City: Kompany 31, Negredo 45. Liverpool: Coutinho 23

Subs: Man City Milner (Nasri, 72), Dzeko (Negredo, 77), García (Silva, 87).

Liverpool Moses (Coutinho, 68), Aspas (Lucas, 82).

Booked: Man City Zabaleta

Liverpool Johnson, Suárez, Moses.

MOM Suarez Rating 8/10.

Possession: Man City 52% Liverpool 48%.

Attempts on target: Man City 6 Liverpool 5.

Ref L Mason (Greater Manchester) Att 47,351.