High-flying Chelsea were brought crashing to earth by Bolton Wanderers on Saturday as the Premier League's big spenders surrendered the top spot after a shock 2-1 defeat at Stamford Bridge.

The Londoners, who topped their Champions League group in midweek with a comfortable win against Besiktas, were overtaken by Manchester United who beat fierce rivals Manchester City 3-1 at Old Trafford.

Chelsea slipped to their first home league defeat of the season when John Terry deflected substitute Henrik Pedersen's last-minute cross past goalkeeper Carlo Cudicini.

It had looked as though Chelsea were heading for a routine three points earlier when Hernan Crespo glanced them in front after 22 minutes but Bolton failed to cave in.

Chelsea had all the play but were pegged back six minutes before the break when Bolton defender Bruno N'Gotty rose unchallenged to head in Youri Djorkaeff's inswinging free kick.

Chelsea introduced Joe Cole and Jimmy Floyd Hasselbaink in the second half but Claudio Ranieri's side gradually ran out of steam against a well-organised Bolton side.

"We had nothing to fear because everybody expected us to lose," Bolton boss Sam Allardyce told Sky Sports.

"After 20 minutes it looked like being a very long afternoon for us but we were well organised and had a little bit of luck."

Defending champions United now top the standings with 37 points, one ahead of Chelsea and two in front of third-placed Arsenal who can go top with a victory at home to Blackburn Rovers on Sunday.

SCHOLES THE KEY

Fit-again England international Paul Scholes was the key to United's victory against City, scoring with two fine headers in a lively lunchtime derby.

Starting a league game for the first time in two months after a groin injury, Scholes headed the champions in front from Gary Neville's cross after seven minutes.

City, who last won at Old Trafford in 1974, fell further behind in the 34th minute when Ruud van Nistelrooy headed home a pinpoint pass from Ryan Giggs.

Shaun Wright-Phillips pulled one back with a low shot after 52 minutes but Scholes struck with another header 20 minutes later to make the points safe.

"He picked the right day to do that," said United manager Alex Ferguson of Scholes. "We all know what he is capable of.

"We could have been four or five up at halftime but credit to City they made it a contest in the second half but you would expect that in a derby game."

Liverpool slipped to their fourth home defeat of the season, going down 2-1 against Southampton who move into the top six thanks to goals from Brett Ormerod and Michael Svensson.

Emile Heskey struck a consolation for Liverpool but it came too late to avoid another damaging setback for manager Gerard Houllier.

Improving Newcastle United moved into fifth place after a 4-0 thrashing of Tottenham Hotspur as two stunning Laurent Robert volleys and a brace from Alan Shearer did the damage.

Everton eased their relegation worries thanks to Wayne Rooney's winner in a 2-1 victory at free-falling Portsmouth, which leaves the south coast side just one place above the relegation zone.

Leicester City had Matt Elliott and goalkeeper Ian Walker sent off in a 2-0 home defeat by Birmingham, while Middlesbrough recorded their seventh consecutive clean sheet in a 0-0 stalemate at home to Charlton Athletic.