Liverpool manager Roy Hodgson apologised to the club's fans after their shock Carling Cup exit at the hands of Northampton.
Hodgson conceded he and the players had to accept responsibility for the defeat as Liverpool saw one of their biggest chances of silverware this season go up in smoke.
Hodgson fielded an under-strength side which still included first-team regulars like Daniel Agger, David Ngog, Ryan Babel and Lucas Leiva and went ahead when Milan Jovanovic scored his first goal for the club in the ninth minute.
However, the Cobblers hit back 10 minutes into the second half through Billy McKay and Michael Jacobs' goal in extra-time appeared to have done enough until Ngog spared Liverpool's blushes four minutes from the end.
But it was only a temporary reprieve as Ngog and Nathan Eccleston missed their spot-kicks, allowing Abdul Osman to net the decisive penalty.
"I don't think we came anywhere near what I hoped to see apart from in the last 15 minutes of extra-time when we made a superb effort after going 2-1 down," he said.
"When it goes to penalties and you are at home and in front of the Kop your hope is that at least the players will have the composure and confidence to win the penalty shoot-out but we didn't.
"All I can do is congratulate Northampton and apologise to everyone; the fans came expecting to see us win and I expected us to win but it wasn't to be.
"These players have to accept responsibility. I accept responsibility for changing a lot of players in the team, I did it because I honestly thought the players I put on the field were good enough to win the game and they weren't.
"The obvious conclusion to that was I shouldn't have changed that many players but we should have been strong enough to get a result.
"We must all take our responsibility. I am just bitterly disappointed that the team I had so much faith in did not repay that faith this evening with the exception of one or two performances."
Hodgson has endured a mixed start to his reign as Liverpool manager after taking over from Rafa Benitez in July.
The Reds have registered just one victory in five domestic games and are 16th in the Premier League table ahead of this weekend's clash with Sunderland.
Hodgson accepted their Carling Cup exit was another setback.
"We wanted to do well in the Carling Cup and we haven't done," added Hodgson.
"We were given a kind draw against a team three leagues below us, were expected to win and when you don't you can expect to be criticised from the top downwards.
"It is a major setback for the club. The Carling Cup is a competition we are capable of doing well in and we were playing lower league opponents.
"Whatever happens, if it doesn't result in a victory it is a very negative thing and a setback for the club, one of many we are facing at the moment."