Three draws in their last three home games have seen the Reds lose touch at the top of the table, and they could be 15 points behind by the time they face Chelsea at Stamford Bridge on Sunday if City win again on Saturday afternoon. However Villas-Boas insisted Kenny Dalglish's men were still title contenders because of their huge recruitment drive this year.
"I've always seen them as title contenders because it's been assumed by them that they would do it," Villas-Boas said. "Dalglish has made the necessary changes to Liverpool for them to progress to title contenders this year."
He added: "He made seven changes to the team, seven coming in, which represents the type of commitment the ownership have to put them back on title-winning ways. They are one of the biggest clubs in England and I always assumed they were challenging for the title."
For Villas-Boas to say otherwise would cast doubt on the championship credentials of his own side, who have themselves fallen nine points behind City.
Defeat on Sunday would see Liverpool move level with Chelsea, who could then be facing a 12-point gap of their own. And if Tottenham to beat Aston Villa on Monday night, the Blues might find themselves outside of the top four.
That is a scenario billionaire owner Roman Abramovich is unlikely to countenance for too long judging by previous experience.
The Russian wasted little time jettisoning Luiz Felipe Scolari almost three years ago when he began to fear the club may not qualify for the Champions League. And with the man who was parachuted in to save Chelsea's season back then - Guus Hiddink - now back on the managerial market, defeat on Sunday would put real pressure on Villas-Boas.
But the 34-year-old insisted losing to Liverpool would be far from a disaster, pointing out Chelsea almost managed to claw back an even greater deficit from February last season.
"Chelsea's recovery last season was from February onwards," he said. "April, March and May are still tight in terms of the calendar. All the top teams will most likely be involved in the Champions League, which can dictate tiredness or less response in terms of the Premier League."
Source: PA
Source: PA