Liverpool lost their unbeaten record in the Premier League in circumstances that left Rafael Benitez blaming the referee, Andre Marriner, for getting three penalty decisions wrong. Reading scored with one that shouldn’t have been given and Liverpool were denied two more legitimate appeals.

The first goal came from the spot, from Stephen Hunt, after an offence by Jamie Carragher that was committed 2ft outside the area, and Liverpool’s sense of injustice was exacerbated when Reading twice got away with flagrant fouls on Fernando Torres well inside the 18-yard line.

Benitez said he was “not happy” with the referee’s decisions, but he and his players must take a sizeable share of the blame for a demoralising result. Liverpool did not play well and at no stage did they resemble title contenders.

“It was outside,” Liverpool’s manager said of the first penalty. “Then it should have been a penalty for us. It was a strange game. We had a few chances but did not take them. After some decisions which we didn’t get, we couldn’t change the result.”

Benitez’s contentious rotation policy saw a novice, Jack Hobbs, given his first start at centre-half, and a parsimonious defence that had previously conceded just six goals in the Premier League never looked comfortable. Benitez conceded defeat with 20 minutes still to play when he withdrew Steven Gerrard, his inspirational captain, to “protect” him, as he put it, for Tuesday’s must-win Champions League tie away to Marseille. He had previously taken off his principal striker, Torres, for the same reason, and fans are unlikely to be impressed by this admission that the team who came back from 3-0 down against AC Milan to win the European Cup now regard a two-goal deficit against Reading as a lost cause. Liverpool stay fourth, but will be overtaken by Manchester City this afternoon if Sven-Göran Eriksson’s team avoid defeat at Tottenham.

It was with one eye on Europe that Benitez rested Sami Hyypia and gave 19-year-old Hobbs his first start in central defence. The young man was not to blame for the result, but Carragher clearly missed his regular partner.

Liverpool might have had the lead after eight minutes, when a long throw from John Arne Riise found Torres near the penalty spot, from where the Spaniard should have done better than shoot straight at Marcus Hahnemann. The American goalkeeper, who has not kept a clean sheet since October 7, made a meal of what should have been a routine save.

The first penalty incident came after 15 minutes. Brynjar Gunnarsson, who had exchanged passes with Bobby Convey, was still a stride outside the penalty area when Carragher brought him down.

After pointing to the spot, Mr Marriner was persuaded by the Liverpool players to consult his assistant, but he, too, got it wrong and the decision stood, allowing Hunt to beat Jose Reina with a penalty struck low to the goalkeeper’s right.

Liverpool grafted diligently to redress the balance, gaining the initiative in midfield through the industry of Gerrard and Javier Mascherano, and justice was done after 28 minutes by an equaliser of classic simplicity. Reina’s long clearance reached Torres who, standing just outside the penalty area, laid the ball off neatly for Gerrard to shoot low past Hahnemann from 10 yards.

Pathetically, the home fans abused the Liverpool captain intermittently, reminding him of his part in England’s failure to qualify for the European Championship. They loved it when he was booked, and were in their element when he was taken off.

Liverpool should have had the first penalty of their own when a marvellous long through-ball from Gerrard set up Torres, who was tripped by Ibrahima Sonko a yard inside the area. The referee compounded his earlier error by waving away Liverpool’s well justified appeals, then did it again in near-identical circumstances early in the second half, when Sonko clipped Torres’s ankle.

The second goal Liverpool needed might have come when Torres met Peter Crouch’s cross from near the byline on the right with a diving header that flashed tantalisingly wide of the far post, and instead it was Reading who regained the lead after an hour, courtesy of a long free kick from Nicky Shorey and Kevin Doyle’s eyebrows.

“It was a great ball in from Shorey. I didn’t get much on it, but it was enough,” Doyle later admitted.

Gerrard was desperately close to supplying a second equaliser within five minutes when he shivered the crossbar from 25 yards. Reprieved, Reading broke out and established their two-goal margin when Convey’s prompting pass sent James Harper away and the former Arsenal midfielder advanced with pace and purpose, outpacing Riise before rounding Reina and scoring with cool aplomb.

Benitez responded by withdrawing Gerrard, who had just gone so close to scoring his second, in favour of Ryan Babel, which was the equivalent of running up the white flag.

Crouch struck a post from 25 yards near the end, but it was too little, too late, and Benitez’s meeting with Liverpool’s American owners this week has the look of being an uncomfortable one for the manager.

Player ratings

Reading: Hahnemann 6, Murty 6 (Cisse 90min), Sonko 5 (Bikey 81min), Ingimarsson 7, Shorey 6, Hunt 7, Harper 7, Gunnarsson 7, Convey 8 (Lita 88min), Doyle 7, Kitson 7

Liverpool: Reina 6, Arbeloa 6, Carragher 6 (Hyypia 82min), Hobbs 6, Riise 5, Gerrard 7 (Babel 71min), Mascherano 6, Sissoko 5, Voronin 5, Torres 5 (Kewell 61min), Crouch 5

Scorers: Reading: Hunt 17 pen, Doyle 60, Harper 67. Liverpool: Gerrard 28