Manchester United manager Sir Alex Ferguson has promised his side will improve in next week's derby against neighbours Manchester City in a potentially pivotal game in the Premier League title race.

The league leaders surrendered a two-goal lead against Everton at Old Trafford on Sunday, with City's subsequent win over Wolverhampton Wanderers, which condemned Terry Connor's side to relegation, cutting the gap to United to three points.

City's substantial goal difference means victory at the Etihad Stadium next Monday will see them top the Premier League with two games remaining, while victory for United would leave them requiring one additional point to claim a 13th Premier League title.

"We've given City the initiative, there's no question about that," Ferguson said. "It makes the game at the Etihad Stadium a really important game now. It makes it the title decider really.

"We make it hard for ourselves but we have to go there knowing we're capable of getting a result. We need to get a result now at the Etihad, there's no question about that.

"There's no reason why we can't do that. There's been an expectancy from City that this could be their decider. But it's our decider too.

"There'll be a reaction from us obviously. There's no question about that. A derby game next Monday against City would always have been a derby game of the highest proportions."

Sir Alex Ferguson
Sir Alex Ferguson knows Manchester United face a tough test to reclaim their Premier League title. Reuters

When asked if the derby represented the biggest during Ferguson's 25-year reign at United, the Scot replied: "Yes, definitely."

Ferguson has outlasted 17 managers prior to the appointment of Roberto Mancini at City, with the Italian having claimed the club's first major honour for 35 years when winning the FA Cup last season.

If City were to finish top of the pile, it would be the club's first top flight title for 54 years, and just the third in their history, as their neighbours United chase down their 20th.

City will be looking to expose the deficiencies in a United defence which was breached four times against Everton on Sunday, and with Mancini's side looking their old self after several mid-season struggles on the road, an exciting evening is in prospect.

"We just needed to see the game out and it was a travesty because some of our football was fantastic," Ferguson said after the point with Everton.

"The goals we scored were great goals. To give away four goals at Old Trafford in a home game like that which was so important to us is unbelievable. I can't believe it."

"We've given ourselves a real task at the Etihad. We'll go there only three points ahead."