City started the game the brighter but as soon as the nerves settled Liverpool took a grip on the game. The Reds had all the chances in the early stages with Threlfall, Flynn and man of the match Paul Anderson all coming close to opening the scoring in the first ten minutes.
Liverpool took the lead their early pressure deserved after 17 minutes. Godwin Antwi was denied by a last gasp intervention from the City captain but from the resulting corner Paul Barratt put a cross into the near post that Threlfall was able to meet with his head and then his foot to score at the Kop end.
The Reds were boosted by the goal and Anderson, Adam Hammill, Craig Lindfield and Charlie Barnett all seemed to step up a further gear as Liverpool created a spate of chances.
Paul Anderson put a cracking low cross into the box for Craig Lindfield to get on the end of only for the Reds' top scorer to see his shot smothered by the impressive City goalkeeper.
Liverpool weren't to be denied however and Anderson created the second goal just after the half hour mark. The former Hull winger picked the ball up on the right and ran into the middle before laying the ball off to Ryan Flynn on the edge of the 18 yard box. Flynn then passed the ball into the back of the net with a composed finish to double the Reds' lead.
Liverpool had chances for a third both sides of half time with Anderson, Lindfield and Barratt all being denied by some good goalkeeping.
Man City began to show how they'd reached the final in the second half however, as they began to put Liverpool under some pressure. Although the Liverpool back four of Threlfall, Antwi, Jack Hobbs and captain Stephen Darby dealt comfortably with most of what their opponents threw at them, City did have their chances.
Sturridge hit the post for City in the 57th minute and then saw Liverpool goalkeeper David Roberts pull off a fantastic save from him in the 72nd minute after Godwin Antwi had twice cleared off the line in the space of about six seconds. City must have realised then that it wasn't going to be their night.
Anderson almost made it 3-0 minutes later when he made a spectacular overhead connection with a Barratt cross only to see his shot cannon back off the bar.
The Reds added a third five minutes before the end when subsitute Miki Roque met a Charlie Barnett corner to head home his first goal in this competition and give Liverpool a commanding lead to take into next week's second leg.