Andre Villas-Boas acknowledged it will be 'very difficult' for Chelsea to win the Premier League title following the 1-1 draw at home with Fulham.
Chelsea lost further ground on the leaders after Fulham's Clint Dempsey cancelled out Juan Mata's 47th minute opener in the Boxing Day derby at Stamford Bridge.
The Blues had recently closed the gap on Manchester duo City and United, but Villas-Boas conceded it will be hard to now finish top after three successive draws.
"The title will be pretty difficult now," said Villas-Boas, who saw his side draw 1-1 at Wigan and Tottenham earlier this month. "The distance by the end of today could make it very hard for us to challenge for the title.
No big drama
"It would have been a good December for us if we'd finished with six points from two home games, but taking this draw into account it makes it difficult now.
"There is no big drama in how we change our perspective but you have to be realistic.
"Unexpectedly we reduced the gap to seven points a few weeks ago but with Manchester City continuing to pick up points, as well as Manchester United, it makes it difficult."
Villas-Boas also explained his decision to start with £50million man Fernando Torres in attack rather than the in-form Didier Drogba.
He added: "Drogba has been involved in every fixture since November apart from Carling Cup game.
"We decided to bring in Fernando who has been working well and he did well for the team and assisted Mata for the goal.
"He showed the same level of commitment as he has been in training in today's game so I was happy."