Liverpool were left languishing in the Premier League relegation zone after the 18-times champions of England suffered a stunning 2-1 loss at home to newly promoted Blackpool at Anfield.
Meanwhile champions Chelsea extended their lead at the top of the table to four points with a 2-0 win yesterday over Arsenal at Stamford Bridge that cast fresh doubt on their London rivals' bid to a mount a title challenge.
In the day's other match, big spenders Manchester City leapfrogged Manchester United into second place after a 2-1 win at home to Newcastle.
But all eyes were on Anfield, where Blackpool won for the first time since 1967 to leave Liverpool with just one win in the league from seven games so far this season.
Charlie Adam fired Blackpool into a 29th-minute lead from the penalty spot before Luke Varney scored what proved to be the Tangerines' winner on the stroke of half-time.
Sotirios Kyrgiakos ran on to head in Liverpool captain Steven Gerrard's 53rd-minute free-kick to give the Reds hope.
And the Greek defender almost snatched a point for the Merseysiders late on but was denied by a brilliant save from Blackpool keeper Matt Gilks in a match where Liverpool striker Fernando Torres limped off after just 10 minutes with a groin problem.
Before kick-off some Liverpool supporters staged the latest protest against feuding American co-owners Tom Hicks and George Gillett, who many Anfield regulars blame for saddling the club with a debt mountain they believe has restricted their ability to sign top-class players.
But manager Roy Hodgson refused to blame off-field distractions for Liverpool's poor start, telling Sky Sports: "It was a start we could never envisage but we've got to live with it and do something about it."
Delighted Blackpool counterpart Ian Holloway added: "What pleased me, coming to Anfield, is we managed to keep our game and score two goals.
"That's the unexpected bit.
"I'm just proud of the lads. It was like the Alamo in the second half. We've got lots and lots to learn. We need a little bit of fortune and what a fantastic save from Matthew Gilks at the end."