Alan Thompson produced the knock-out blow to floor Rangers' title hopes - even if Celtic manager Martin O'Neill still publicly insists the championship is not won yet.

Rangers are now 12 points behind their arch-rivals after the Englishman's first-half winner decided the second round of this week's Old Firm war.

Three players saw red in last week's CIS Insurance Cup semi-final, but tempers were kept in check for Hugh Dallas who took charge of his first Old Firm clash at Parkhead since the infamous Glasgow derby of May 1999.

On that day the Motherwell official was hit by a coin thrown by a fan - but the only moments of controversy today came when Fernando Ricksen received his marching orders and when Rangers had a penalty appeal turned down.

Ricksen was ordered off just before the break for his second bookable offence - a late challenge on Tom Boyd - to bring up the sixth red card in Old Firm clashes this season.

The Dutchman, who was dragged off by Dick Advocaat after being terrorised by Bobby Petta in August's 6-2 drubbing, was again left in a daze by the winger and showed his short fuse again.

Even with Ricksen in their starting line-up, Rangers looked vulnerable at the back. Didier Agathe showed a quick turn of pace in the fourth minute to leave Arthur Numan in his wake and keeper Stefan Klos had to punch clear.

Dallas brandished his first card of the game in the 11th minute when Ricksen brought down Alan Thompson.

Henrik Larsson, the undisputed king of Parkhead with 37 goals this season, saw his over-head kick fly just over the bar after some hesitancy in the Rangers defence.

But the Celtic fans lifted the roof off the stadium in the 17th minute when Thompson put them ahead.

Chris Sutton played the ball through to Larsson and the ball was squared into the path of the former Aston Villa midfielder, who was sent off in the 5-1 defeat at Ibrox.

Thompson fired home to send the home supporters into raptures.

Rangers rallied immediately with manager Advocaat desperate shouting instructions from the sidelines.

In the 29th minute Jorg Albertz rose highest in the area to head Neil McCann's corner just over as the visitors threatened an equaliser.

But Celtic continued to force Rangers back and Bert Konterman had to be alert in the 26th minute to head clear Neil Lennon's dangerous cross with Ramon Vega lurking ominously.

Klos also had to be on his toes two minutes later when Lennon crossed for Sutton to head on target - but Klos made a desperate save with Vega again looking to get on the end of it.

Rangers were feeling the pressure but they stayed in the game and Robert Malcolm had to block Sutton's shot in the 31st minute after Larsson had found his partner inside the box.

Klos again had to race off his line in the 35th minute to deny Petta after the Rangers defence had allowed Robert Douglas' long punt downfield to bounce dangerously.

The highly-charged home side went close again in the 39th minute after more confusion in the visitors' defence.

Konterman was caught napping to let Sutton run onto Thompson's through-ball but Klos again made a timely block.

The German, however, cleared straight to Paul Lambert and he had to race back to his goal to save the midfielder's effort.

But Rangers' problems grew in the last minute of the half when Ricksen was shown his second yellow card for a late tackle on Boyd and Advocaat's men welcomed the half-time whistle to regroup.

Down to 10 men, Rangers rallied in the second half and Albertz blasted over after Malcolm had found him in space.

After that flurry of action, Celtic picked up the pace and again lay siege to Rangers' goal.

Petta was relishing the space and his dangerous in-swinging cross had to be cut out by Albertz in the 48th minute.

The flying winger outwitted Tugay moments later on the touchline and raced down the left flank before curling another cross into the box which Sutton got a head to, but Konterman headed behind for a corner.

Rangers put up a spirited fight and Douglas was finally tested in the 49th minute following Rangers' best move of the match when Neil McCann found Tore Andre Flo who teed the ball up for Albertz to blast at the keeper.

Moments later Douglas flapped at an Albertz corner and the ball fell to Konterman who fired on target - but the Celtic keeper took the sting out of his effort before Olivier Tebily desperately headed off the line.

Albert was eventually forced to leave the pitch moments later after soldiering on despite an early injury and he was replaced by Allan Johnston, but Rangers' stubbornness was making the Celtic defence nervous.

However, Scott Wilson made an important challenge in the 68th minute to deny Larsson a header on target after Agathe's dangerous right-wing cross.

Celtic should have wrapped up the points in the 71st minute following a great flowing move as Rangers were caught on the break.

Agathe found Larsson in space in Rangers' half and he waited before threading the ball through to the over-lapping Thompson, who blasted just over the crossbar.

The heavens hoped moments later and Klos could only parry a fiercely-struck 22-yard drive from Agathe.

But Dallas turned down what looked like a certain penalty in the 81st minute when Sutton appeared to pull Flo back in the box with the Norwegian preparing to shoot.

The home side looked nervous in the final stages as the whistles from their fans rung around the stadium.

But as Dallas blew the most important whistle of the season so far to end proceedings, the home supporters began to sing "We're going to win the League!"

Privately, at least, O'Neill will now surely be starting to believe it.

Teams

Celtic: Douglas, Boyd, Mjallby (Tebily 54), Vega, Agathe, Thompson, Lambert, Lennon, Petta, Larsson, Sutton.

Subs Not Used: Gould, Johnson, Healy, Smith.

Booked: Petta.

Goals: Thompson 17.

Rangers: Klos, Konterman, Malcolm, Wilson, Ricksen, Ferguson, Albertz (Johnston 63), McCann, Numan, Flo, Miller (Tugay 46).

Subs Not Used: Christiansen, Hughes, Carson.

Sent Off: Ricksen (45).

Booked: Ricksen, Konterman.

Att: 59,496

Ref: H Dallas (Scotland).