Without first-choice central defenders Rio Ferdinand and Nemanja Vidic, the leaders were undone by Dirk Kuyt's masterclass in goal poaching and torn apart by Luis Suarez's dribbling in a 3-1 defeat at Anfield.
United, seeking to beat the record of 18 titles they share with Liverpool, had hoped to go six points clear after Arsenal drew 0-0 with Sunderland on Saturday. Instead they are three ahead and the London club has a game in hand.
Until a month ago, United were unbeaten in the league and grinding out results without always playing in the manner of champions-elect, but three defeats in five games bear the hallmarks of a wobble as unfamiliar as it could be costly.
In previous seasons, Sir Alex Ferguson's sides have built a reputation for finding their form at the "business end" of the season - in other words, now.
With champions Chelsea suffering a mid-season slump and Arsenal and Manchester City also falling to surprise defeats, pundits had said United were top of the table by default because some of their own dropped points had gone unpunished.
Luck seems to be turning against them, however, and the leg injury to winger Nani provided more misery on a rotten day at Anfield after the Portuguese had blundered to present Kuyt with the second goal of his hat-trick.
United's second defeat in a week, following Tuesday's loss at Chelsea, betrayed a team lacking speed and creativity once Nani went off and looking fragile at the back, with their stand-in central defenders - Wes Brown and Chris Smalling - often out of sync with each other.
Factor in Ferguson's charge of improper conduct this week for critical comments about referee Martin Atkinson, and United are not looking as cocksure as they might.
The last time they lost three times in five games was in April 2004, when Arsenal went on to be crowned champions.
BARELY NOTICED
United, in fact, had so much to worry about that Ryan Giggs's feat of surpassing Bobby Charlton's record 606 league games for the club was barely noticed and Javier Hernandez's late goal registered with many people only when the tannoy announced it.
Arsenal look to have an easier run-in than United, who must still travel to Emirates Stadium, meaning Arsene Wenger could have been beaming as much as Dalglish on Sunday.
A rousing rendition of "Happy Birthday" echoed round Anfield in the closing stages of the game as home fans belatedly celebrated manager Dalglish's 60th.
United had ensured the gifts kept coming.
After 34 minutes, the visitors allowed Uruguayan Suarez to dribble past three players from a tight angle on the left before his poke across the face of the goal beat Edwin van der Sar and was turned in on the line by Kuyt.
Nani then had the sort of moment that will haunt him in nightmares, for he misdirected a defensive header into Kuyt's path to provide an assist the Portuguese would have been proud of at the other end of the pitch.
Shortly afterwards N
‘Maybe I’ll be signed by Wrexham, who knows? English football would suit me – if an offer came, I wouldn’t think twice, I’d go immediately’ Euro 2024 cult hero reveals his UK dream
‘Managing Leeds? It was an option that appeared, but it wasn’t the right timing. I decided it wasn’t a good idea to leave the club I was at mid-season’: Premier League boss admits to turning down opportunity to replace Jesse Marsch in 2023
