The Reds skipper has been in a war of words with Wayne Rooney in recent weeks after the Manchester United great questioned his leadership qualities in light of the club's alarming downturn in form.
"It’s a really worrying performance for Liverpool, it’s as bad a performance from them that I’ve seen in a long time," Neville said while on co-commentary for Sky Sports.
"They’ve lost every battle one-on-one, every single one of them. Their legs looked gone in that first half.
Virgil van Dijk was really strange for Man City’s second
Gary Neville
"[Virgil van Dijk](/topic/virgil-van-dijk) was really strange for Man City’s second. He was just standing there and lets it hit him. There’s a little movement from his right leg and it kills his goalkeeper.
"Liverpool fans will be worried. There was a huge amount of optimism around the transfer window but it’s not quite happening yet and this is a big disappointment today."
Neville added: "When you're losing 3-0, you can't be whinging about a disallowed goal."
Former Liverpool striker Sturridge also questioned Van Dijk's defending. He said on Sky Sports: "Virg sticks a leg out but it wasn’t decisive.
"Liverpool have been well short, I expected more organisation and better pressing. I expected a better performance after the Real Madrid win but the players just haven’t been at it."