The game looked destined for the draw that would have suited only Sir Alex Ferguson until Torres made his dramatic intervention to close the gap on United to two points, although Liverpool have played a game more.
Chelsea saw Frank Lampard sent off on the hour for a foul on Xabi Alonso, a decision they contested bitterly as they claimed he took the ball first before making contact with the Liverpool midfield man.
But they can have no serious complaints about the result after Liverpool dominated throughout, taking the game to Chelsea in a game played out in freezing conditions.
Torres broke the deadlock a minute from time when he headed in a near-post cross from Fabio Aurelio, then set the seal on the win in stoppage time with a simple finish after substitute Yossi Benayoun had robbed Ashley Cole.
Anfield was ecstatic at the final whistle, with recent traumas seemingly forgotten and hopes of a first title since 1990 revived again.
Chelsea now face a massive task to rebuild their challenge and on this evidence there must doubts about whether they have the desire to perform the task.
They have picked up only one point this season in five games against their closest title rivals, with Liverpool completing a double over the Londoners.
Liverpool were the hungrier side from the first whistle, with Chelsea keeper Petr Cech saving well from Alonso and Benayoun and Alex performing heroics in defence to keep Rafael Benitez’s side at bay.
For manager Benitez, with owners Tom Hicks and George Gillett looking on, it was a crucial victory and one the Spaniard and Liverpool needed desperately to over-shadow the off-the-field politics that have proved such a distraction in recent times.
Liverpool, as expected, did not even include Robbie Keane on the bench – only intensifying speculation that his short and unfulfilling Anfield career is drawing to a close.
Chelsea keeper Cech was swiftly in the action, acrobatically turning over a rising 25-yard drive from Alonso as Liverpool made the more forceful opening.
Cech was less convincing after 18 minutes when he fumbled a routine shot from Javier Mascherano, but no Liverpool player was in the vicinity to take advantage of his moment of poor handling.
Chelsea’s best performers were all in defence, and Alex came to the rescue with a crucial block on Torres after he worked an opening in the penalty area.
Scolari bemused by Lampard red card
Luiz Felipe Scolari’s side were fortunate to escape four minutes before the interval when Cech saved well from Albert Riera, with the rebound striking Cole and rolling inches wide.
Liverpool had hardly been sparkling, but at least they had shown the attacking intent, while Chelsea had offered nothing in the way of threat to keeper Pepe Reina.
That same pattern resumed after the break, with Dirk Kuyt hooking an effort off target after Gerrard’s corner found him unmarked at the far post, and Alex then made another vital intervention to halt Torres.
Old enemies Lampard and Alonso were involved in a flashpoint on the hour that saw Chelsea’s England midfield sent off.
Lampard challenged with his studs up and referee Mike Riley had no hesitation in brandishing the red card.
It was a moment laced with irony, as prior to the game Lampard had spoken of a lingering feud with Alonso following an incident in January 2005 when Spaniard suffered a broken ankle after a tackle from the Chelsea midfielder.
After receiving medical attention Alonso almost added insult to Chelsea’s perceived injury eight minutes later when he saw a shot deflected off Alex on to the bar.
Scolari decided it was time for a change, sending on Deco and Didier Drogba for the anonymous Florent Malouda and Nicolas Anelka.
It led to Chelsea’s first serious effort on target with 16 minutes from time, a tame shot from Salomon Kalou that was comfortably collected by Reina.
Liverpool were still doing all the pressing, however, and Cech had to be at his best to turn away a curling 25-yard drive from substitute Benayoun.
The Israeli midfielder then sent a searing volley inches over as Liverpool set themselves up for one last big effort to break Chelsea’s resolute rearguard.
The breakthrough came two minutes from time when Torres glided in Aurelio’s cross – then turned into an empty net after Cole was caught in possession by the lively Benayoun.
The Israeli international was involved in bizarre incident near the end of the game when Bosingwa put his studs high on the back of Benayoun, pushing the Liverpool midfielder off the pitch, but the Chelsea defender escaped punishment.
Liverpool merited the three points and continue their pursuit of United, but for Chelsea the title race may now be run.
Liverpool: Reina, Arbeloa, Carragher, Skrtel, Aurelio, Kuyt, Alonso, Mascherano (Babel 83), Riera (Benayoun 74), Gerrard, Torres (Ngog 90).Subs Not Used: Cavalieri, Dossena, Agger, Leiva Lucas.
Booked: Mascherano, Alonso, Gerrard, Arbeloa.
Goals: Torres 89, 90.
Chelsea: Cech, Bosingwa, Alex, Terry, Ashley Cole, Ballack, Mikel, Lampard, Kalou (Stoch 85), Anelka (Drogba 69), Malouda (Deco 69).Subs Not Used: Hilario, Ivanovic, Ferreira, Mancienne.
Sent Off: Lampard (60).
Booked: Ashley Cole, Mikel, Terry.
Ref: Mike Riley (Yorkshire).