Ten-man Liverpool, thanks to a 44-yard free-kick from veteran Gary McAllister, somehow clung onto their Champions League dreams in one of the most dramatic Mersey derbies ever played.

Liverpool had their third man sent off in four league games when Igor Biscan trudged away following his second yellow card with 24 minutes left.

It seemed then that, in a match that saw 12 yellow cards shown and one red, Liverpool would be denied victory in this dramatic 164th derby showdown.

Liverpool had taken the lead early on through Emile Heskey and although Duncan Ferguson equalised before the break Markus Babbel grabbed his fifth goal of the season to fire the Reds ahead again.

But that was only the beginning of the drama. Biscan was dismissed, following Danny Murphy and Steven Gerrard in recent weeks, and Liverpool, who had missed a penalty of their own, were hauled level by a David Unsworth spotkick.

Surely Liverpool couldn't find more reserves at this stage as Everton swarmed all over them.

But in the fourth minute of injury time, after substitute Niclas Alexandersson had fouled Gregory Vignal, up stepped McAllister to unleash his cracker and Liverpool had won.

There was barely seconds left and Everton had seen the spoils snatched from them to leave them still worried about relegation fears of their own.

The four Everton players expected to be ruled out through injury - Ferguson, Richard Gough, Abel Xavier and David Unsworth were all in the starting line-up.

Liverpool, clearly with Thursday's UEFA Cup semi-final clash with Barcelona in mind, were without Steven Gerrard, while Patrik Berger and the suspended Danny Murphy were also missing.

Everton desperately needed the points to end their relegation worries while Ipswich's win at Middlesbrough earlier in the day left Liverpool nine points behind third place with three games in hand.

Anything but a victory for Gerard Houllier's men would surely destroy their Champions League ambitions.

Against that background it was a predictably ferocious start with tackles flying in. One from Stephane Henchoz in the opening minute stopped Kevin Campbell in his tracks just six yards out.

On four minutes Liverpool got the dream start. Dietmar Hamann's instant ball forward sent Emile Heskey steaming away, Steve Watson played him onside and Heskey kept his nerve to race clear and crash home his 21st goal of the season.

Referee Jeff Winter then booked Michael Ball and Biscan for incidents separated only by 60 seconds, one for a foul on Hamann and the Croatian for a stray elbow into Ball's face.

Ferguson should have done better when he miscued in front of goal after Campbell and Scot Gemmill had fashioned a 19th-minute chance for Everton.

Everton's approach was the expected aerial warfare, with balls aimed towards Ferguson and Campbell, and Sami Hyypia and Henchoz had their work cut out coping.

On 23 minutes Everton found problems in the air in their own box when Paul Gerrard didn't get much distance on a punch out and Heskey's header was cleared by Gough. Then Sander Westerveld flapped unconvincingly at a Watson cross and Gemmill lunged forward to head just wide of a gaping net.

Liverpool tried to take the sting out of the game with neat, controlled possession play, but whenever Everton got the ball back, it was soon lumped back into their opponent's box.

This Everton style brought it's reward in the 41st minute. Campbell won another high ball lofted into the box by Ball and, although Jamie Carragher got in a vital block the ball spun invitingly into the path of Ferguson who drilled home an equaliser.

Ferguson wheeled away, waving his shirt over his head and was promptly booked for his troubles.

Everton maintained the abrasive edge after the break but Liverpool broke the stranglehold on 56 minutes. Hamann flighted a 40-yard pass out to the left for Fowler to scamper away. His cross clipped Ball, then Unsworth, and fell invitingly for Markus Babbel to smash past Paul Gerrard.

Two minutes later Fowler could have finished off Everton. Vladimir Smicer's ball into the box was cleverly touched past Gough by Fowler, inviting the challenge and the tumble.

Referee Winter pointed to the spot, and after considerable argument, the Liverpool skipper stepped up for the penalty. He ran in, half stopped, and then saw his shot smack against a post and bounce away.

Weir's weak backpass almost presented Fowler with another chance but Gerrard got there first to hack away.

Alessandro Pistone took over from the limping Watson on 61 minutes and Niclas Alexandersson replaced Gough for a final assault.

Gemmill's 68th-minute drive from close range smacked into Hamann's arm but this time Winter didn't point to the spot.

On 76 minutes, Biscan flew into Unsworth. TV replays showed that he didn't make any contact but Winter was satisfied there was intent and produced a second yellow, and a red, and Biscan was off for the second time in his short Liverpool career.

Unsworth was booked for a foul on Smicer, but there was more drama still. On 81 minutes Winter decided that Hyypia had held down Ferguson in the box and awarded Everton a penalty that Unsworth blasted past Westerveld.

Carragher and McAllister were booked for arguing and then Henchoz went into the book for more dissent.

Houllier took off Fowler and put on reserve full-back Gregory Vignal, opting clearly for the point rather than any further damage.

The French youngster looked to have been hauled down in the box by Unsworth soon after but this time Winter wasn't interested.

And still the drama wasn't over. In the fourth minute of injury time, Alexandersson brought down Vignal and McAllister lashed his long-range free-kick past Gerrard.

The celebrations were more in disbelief but Liverpool's chase for honours on three fronts was still on.

Teams

Everton: Gerrard, Weir, Gough (Alexandersson 73), Ball, Steve Watson (Pistone 61), Unsworth, Xavier, Nyarko, Gemmill, Campbell, Ferguson.

Subs Not Used: Pembridge, Simonsen, Gravesen.

Booked: Ball, Ferguson, Gough, Gerrard, Unsworth, Alexandersson.

Goals: Ferguson 42, Unsworth 84 pen.

Liverpool: Westerveld, Babbel, Henchoz, Hyypia, Carragher, Smicer, Hamann, McAllister, Biscan, Heskey, Fowler (Vignal 84).

Subs Not Used: Ziege, Owen, Arphexad, Wright.

Sent Off: Biscan (77).

Booked: Biscan, Hamann, Carragher, McAllister, Henchoz.

Goals: Heskey 5, Babbel 57, McAllister 90.

Att: 40,260

Ref: J Winter (Stockton-on-Tees).