Liverpool showed "naivety" in letting slip a 3-0 lead in the final 11 minutes to draw 3-3 at Crystal Palace, says their former midfielder Dietmar Hamann.
The Reds, who have one game remaining, are top of the Premier League by one point, but nearest rivals Manchester City have two matches left to play.
"They handled the situation really badly," said Hamann on the BBC's Match of the Day. "It was astonishing.
"At no time did they give it any consideration Palace might come back."
Liverpool went into the match at Selhurst Park level on points with City, but with a nine-goal deficit in goal difference.
Brendan Rodgers's side took the lead in the first half through Joe Allen, and were 3-0 up after 55 minutes as Daniel Sturridge and Luis Suarez scored within two minutes of each other.
The Reds, perhaps sensing an opportunity to eat into City's superior goal difference, continued to commit men forward and had 26 shots in the game.
However, Damien Delaney pulled one back in the 79th minute before Dwight Gayle completed a remarkable comeback with two goals in the final nine minutes.
"It was naivety," said former Germany international Hamann, 40.
"Liverpool were so good in the first 55 minutes, and you felt that if they scored six or seven they could still win the league even if Manchester City won their two final games.
"However, once they didn't score their fourth goal after 65-70 minutes, they had to change their mindset.
"They should have been thinking, 'we need to win this game, whether it's 3-0, 3-1 or 3-2'. They didn't do that and were punished for it."
Hamann highlighted the defensive partnership of Martin Skrtel and Mamadou Sakho, and believes Liverpool need to strengthen at the back in the summer.
"They have conceded goals all season long and have got away with it because they were so prolific going forward," he said.
"The partnership between Skrtel and Sakho concedes an awful lot of goals, so this is an area they need to look at."
Hamann's former team-mate Robbie Fowler agreed Liverpool had been naive, but believes the team deserve credit for a season in which they have improved dramatically on last year's seventh-place finish.
"With all due respect, Liverpool were not going to score nine goals, which they needed to catch up, so they just needed to shut up shop and win the game," said Fowler.
"Regardless of what happens, Liverpool have been a real joy to watch. I don't think they will win it now - it's Man City's to lose - but this season has still been a success."
City host Aston Villa in their game in hand on Wednesday, with West Ham visiting Etihad Stadium on the last day of the season.
Liverpool conclude their campaign with a home match against Newcastle.