Dion Dublin scored a dramatic injury time winner today at Anfield to deal a hammer blow to Liverpool's title hopes.
Robbie Fowler opened the scoring for Liverpool after 52 minutes only for Noel Whelan to equalise 13 minutes later.
Stan Collymore scorned a glorious chance of getting the winner for Liverpool before Dublin's late, late strike.
Manchester United remain three points clear of Arsenal and Liverpool at the top of the table.
Not only did Dublin's goal rock Liverpool it also rocketed Coventry out of the bottom three.
And 'keeper David James must shoulder most of the blame for this shock defeat. He flapped at a corner Gary McAllister's corner, leaving Dublin in the clear. He tried to get back but the Coventry defender was able to find a clear path to goal. Liverpool remain third behind Arsenal and United and that may be all they can hope for.
Coventry, fighting for their premiership lives, could have been two goals down in the opening five minutes. Steve Ogrizovic was forced to work overtime to stem the flow of attacks and he did a superb job in the first half. Stig Bjornebye floated in a corner after three minutes and John Barnes got in a free header, only to see the ball drift wide of the post.
Two minutes later Fowler sent Steve McManaman clear on goal but he somehow sent his shot off-target.
Coventry broke forward after 24 minutes and a rare mistake by Bjorn Kvarme gave them a glimmer of hope.
The Norwegian international tried to steer a cross from Richard Shaw back to 'keeper James but Peter Ndlovu managed to intercept it. However, he was unable to get any power on it much to the Kop's relief. It was a brief moment of respite for Coventry, who must have been grateful to go in a half time still on level terms.
Fowler sent a shot into Ogrizovic's arms then Jamie Redknapp thundered a spectacular 20-yard volley inches wide before setting up Collymore. But the veteran keeper was again equal to the task, beating away his shot then holding on to another fierce effort from Redknapp. Collymore and Fowler again went close as an embarrassingly one-side first half came to an end.
Liverpool continued in the same vein at the start of the second period with McManaman getting into a good position from Bjornebye's cross only to direct his header into Ogrizovic's body.
Coventry caved in after 52 minutes with a wonder goal from Fowler, his 29th of the season for Liverpool and his seventh in six matches.
Barnes picked him out unmarked in the penalty area with a delightful defence-splitting pass. The ball sat up nicely for the England striker but the finish was still awesome whistling past Ogrizovic into the corner of the net.
That looked like the end for Coventry but incredibly they drew level in the 65th minute. McAllister swung in a corner from the right, which was headed on by Dublin, linking up with the attack. He nodded the ball on and Whelan powered a header beyond the despairing James to give themselves a lifeline.
Collymore had a glorious chance of regaining the lead for Liverpool when McManaman put him clear in front of the posts. But with only Ogrizovic to beat the £8.5million striker sent his shot high and wide into the crowd.
Liverpool manager Roy Evans brought on Patrik Berger for Bjornebye with 11 minutes to go but it was Coventry who got the killer goal, not the title contenders. Evans will now reflect on 18 home points going astray at Anfield and that is hardly Championship form.
Copyright - Press Association