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.
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.
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.
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.
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.
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.
