A win, in what under-pressure Liverpool manager Rafa Benitez had described as a potentially make-or-break match for his side's domestic ambitions, would have sent either club temporarily fourth in the standings.
Instead, City chalked up a sixth consecutive draw, one short of the Premier League record, while Liverpool had to rely on an equaliser from substitute Yossi Benayoun to salvage a point and stay seventh.
"I'm a little bit disappointed because we had chances at the end," said Benitez, whose team have now won just once in 10 games. "But with the problem that we had before, the two substitutions after 18 minutes, to still come back we showed very good character.
"Until the last minute we were pushing and pushing...I think in the circumstances it was a very good performance from the team."
Two goals in the space of 74 seconds then rounded off the afternoon's entertainment, with Stephen Ireland slotting home to put City ahead in the 76th before Benayoun stabbed in a 77th-minute equaliser.
"We are disappointed because I think we were the better team today," said City manager Mark Hughes. "We showed great character to come back from a goal down.
"That's the frustration for us at the moment, we are allowing those winning situations to go away from us...because really Liverpool weren't causing us too many problems."
