Fergie: It is just the 2 of us.

Sir Alex Ferguson believes the title battle is a two-horse race ahead of Sunday's Manchester derby with champions City.

The Reds are three points clear at the Barclays Premier League summit while the Blues are seven points ahead of third-placed Chelsea. Despite confessing he thinks it is a tough division where shock results can happen every week, the manager admits it would be a major upset if the trophy does not remain in Manchester come May.

"I think the two sides have that gap over Chelsea, Arsenal and Tottenham," he said at Friday's pre-match press conference. "It will be difficult to think the two of us will collapse. I think it will be between the two of us."

However, the boss does not think a six-point gap at the top would count for too much with the busy festive period ahead, if his team were to end City's long unbeaten run at the Etihad Stadium.

"It won't mean a great deal because there's such a long way to go until the end of the season," he stated. 

"You can never be sure and you can lose to anyone. That's the kind of league we're in. It's a tough league.

"The derbies had a big impact [last season], particuarly that 6-1 defeat, on goal difference. That's what cost us."

Sir Alex is also quick to recognise that the derby has now become the most important fixture on United's calendar.

"Liverpool and United games over the last 25 years have been unbelievable," he said. "They've always been important games. But it's shifted because, at this moment, Liverpool aren't challenging for the league like City are.

"City are our biggest threat, so that's changed. And we're their biggest threat. We have to accept their challenge like we did when Chelsea came along and when Arsenal overtook Liverpool in the early 90s. We have to do it again."