Lyon sealed their place in the last 16 of the Champions League as Liverpool's traumatic season continued with a 1-1 draw at the Stade Gerland.
Lisandro Lopez's late equaliser denied the Reds a crucial victory and a major blow to their FC's qualifying hopes as Lyon secured Champions League progression.
With Jamie Carragher filling in for the injured Glen Johnson at right-back, the ineffectual Andriy Voronin up-front alongside an ailing Fernando Torres, and no Steven Gerrard to drive the midfield, the win the Reds desperately needed to keep their Champions League dream alive looked unlikely.
The much-maligned Ryan Babel had scored a wonderful goal with just seven minutes left and if Liverpool could have hung on to that lead they would still have had a realistic chance of reaching the last 16.
But it was not to be. Lisandro broke Liverpool's hearts with a poacher's goal in the 89th minute and now the Reds' Champions League chances hang by the most slender of threads – even if they win their remaining two games, there is no guarantee of progress in this competition.
Liverpool had produced a spirited performance and yet with seconds remaining, Michel Bastos's flicked header sent Lisandro galloping into the penalty area, and the Argentinian supplied a cool finish over the advancing Pepe Reina.
The Merseysiders are now five points behind Fiorentina with only two games to play; away at Debrecen before they end the campaign at home to the Serie A side.
After a nervy first ten minutes, Liverpool settled down. Fernando Torres, playing in spite of a nagging groin injury, was first to see a chance go amiss when, unmarked just outside the penalty area, he picked up Emiliano Insua's pass from the left only to see his shot saved by the two feet of Lyon keeper Lloris.
Five minutes later another left wing cross from Spanish defender Insua cross found Dirk Kuyt, whose half volley was brilliantly tipped over the bar by Lloris.
Liverpool defended deep and in numbers, desperate not to concede early while Lyon had plenty of possession. They moved the ball around crisply and Bastos tested Jose Reina from 20 yards while the giant Gomis had Liverpool's keeper stretching again with a 25-yarder.
For the remainder of the first half, Liverpool were the better team, playing without fear – Lucas and Javier Mascherano bossed the midfield – but failing to trouble Lyon's defence. The French side, meanwhile, did almost nothing to alarm the away fans.
After a frustrating start to the second half for Liverpool Michel Bastos took advantage of a high cross to try and put Lyon ahead but his effort went just over Jose Manuel Reina's crossbar.
Lyon finally began to set up camp in Liverpool's half but a free kick from Kallstrom, following a foul by Voronin, sailed high over Reina's crossbar.
Lyon started the second period with a quicker tempo, and Lisandro hooked over an Aly Cissokho cross. The full-back's next cross saw Bastos head over the far angle.
As the clock ticked down Liverpool reignited their campaign in style when Babel picked up the ball on the edge of the area, danced past two defenders and unleashed an unstoppable drive that a flying Lloris could only watch hit his top corner.
Babel then spurned a chance to put the match beyond Lyon when he latched onto Kuyt's cross-goal pass wide on the left and played a one-two only to completely fluff the follow-up shot.
Moments later Babel, and Liverpool, were sorely regretting that miss when Lisandro muscled his way towards goal to latch onto Bastos's headed pass to beat Reina with a deft goal.
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