The table's two frontrunners put on a fine display of football in freezing conditions at Prenton Park, where Dani Pacheco illustrated his Premier League credentials with a superb performance and a cracking first-half volley.
Jay Spearing was Liverpool's other goalscorer, but strikes from James Poole, Alex Nimely and Robert Mak ensured City left with a point.
The Reds carved out the first real opportunity when Alex Kacaniklic crossed from the left on five minutes. Spearing tried to curl the ball into the top-right corner but his effort floated wide
City responded with a wicked 20-yard snapshot from Poole which rookie goalkeeper Peter Gulacsi did very well to palm away.
But it was John McMahon's troops who deservedly broke the deadlock on 16 minutes - and they did so in style. Pacheco was the architect as he spun past one man, then another before tapping to Spearing. The Wirral-born youngster took one touch, looked up and powered a 25-yard shot right into the bottom corner.
It should have been 2-0 minutes later when Pacheco robbed possession before a superb pass into Nathan Eccleston's run. The 19-year-old, who signed a new contract last week, will be disappointed to have found the hoardings rather than the net.
Instead it was the visitors who struck next on 25 minutes after a brilliant save from Gulacsi fell to Mak, who blasted home with aplomb.
It was turning into a cracking contest, with both sides attacking in numbers. Spanish prodigy Pacheco was the puppeteer for Liverpool and got his just rewards with a picture-book goal on 30 minutes to restore his side's lead. The 18-year-old took one touch after Eccleston's centre before volleying home from outside the box. Awesome.
The excellent Spearing almost made it 3-1 before half-time with a header from the edge of the box. Daniel Ayala also came close with a near-post dig from Pacheco's corner.
The young Reds got the ball in the back of the net soon after the restart when Ayala converted an Eccleston cross before being adjudged offside.
McMahon's boys were starting to play some sublime football and City stopper Gunnar Nielsen was forced into a fine double save from Kacaniklic and Pacheco.
It was a surprise, then, when City equalised on 65 minutes when Nimely slotted past Gulacsi after being fed through by Donal McDermott.
One minute later Liverpool were shell-shocked when a lovely City move left Poole in a yard of space near the penalty spot. Gulacsi could do nothing to stop his volley and it was 3-2.
Mak could have got a second and his team's fourth on 79 minutes but sliced wide from an angle.
Pacheco had a superb chance to level the game with minutes to spare after Gulacsi's punt forward but couldn't make decent contact in the box.
Instead it was Saric who got the leveller, firing home Ayala's chest down following Robbie Threlfall's launch into the box deep in stoppage time.