Manchester United are ready to tackle head on any challenge from super-rich neighbours Manchester City, manager Alex Ferguson said today.

But Chelsea and Liverpool, equal top on points in the Premier League, remain United's biggest threat for the time being, he added.

City, flush with money following the takeover earlier this year by their new Abu Dhabi owners, are at home to United in the Manchester derby at Eastlands on Sunday.

After buying Brazilian forward Robinho for a British record transfer fee of 32.5 million pounds ($50.18 million) in August, City are poised to try and make more major signings in the January transfer window.

"It was an immediate impact and what we had to do was sit back and accept this challenge," Ferguson said.

"We experienced it with Chelsea when (Roman) Abramovich came in and bought all those players that summer and they won the league in the next two years," Ferguson told reporters.

"The one thing you can say about this club is that it can accept a challenge and do something about it and we had to do something about it or we would be second for ever more.

"We accepted it and fortunately we have won the last two leagues."

The full impact of City's new ownership is yet to be realised despite acquiring Robinho. They are 11th in the table under the management of former United striker Mark Hughes.

Ferguson said his major focus remained on Chelsea and leaders Liverpool as third-placed United look to make up an eight-point deficit and stay in contention for a hat-trick of titles.

"There may be a different focus (on the derby) this time with the prospect Mark Hughes has got of money available and buying so many players in January, but that doesn't change our side of it," he said.

"That's the future: how Mark Hughes uses the money and how he shapes his team.

"At the moment our threats are still Chelsea and Liverpool, who are sitting above us."