Michael Owen found the target again to lengthen Liverpool's lead at the top of the Barclaycard Premiership to four points.
Hoddle and Houllier hail Owen
Arsenal lost and Manchester United only drew, but Liverpool produced a crucial victory at Anfield on the back of a tough European week.
The rest may be talking of tiredness, but not Gerard Houllier's resolute, determined Liverpool outfit.
Spurs, to their immense credit, gave everything and thought they had grabbed a point when Dean Richards headed them level with eight minutes to go.
But Liverpool's response was electric and decisive and when Owen's surge down the left was ended by Stephen Carr's desperate tackle, it was left for the striker to drill home the spot-kick - his ninth goal for club and country in 29 days and his 120th for the club in 220 games.
Spurs, having won only three times at Anfield in the league since 1911 and beaten in their last six visits, played their part in a high-quality battle.
Liverpool were without Emile Heskey (groin) but had Steven Gerrard back, while Jamie Redknapp's return after his summer move to north London received a fine ovation from all sides of the ground, plus handshakes from several former colleagues.
The home side started strongly with neat interchanging and passing and Owen had a trio of half chances, while Spurs hardly got into the Anfield box for half an hour.
The leaders had vastly more of the possession, but Robbie Keane flashed a rising drive which hit Gus Poyet and cannoned over the bar.
After 21 minutes Redknapp was fouled by Dietmar Hamann 30 yards out, and from a neat free-kick routine, Redknapp's fierce drive came back off Jerzy Dudek but was hacked clear by Carragher.
The best chance of the first half fell to the impressive Salif Diao who met Carragher's clever ball into the box, and his instinctive low hook beat Kasey Keller, and the far post by inches.
Liverpool had the ball in the net through Owen - but referee Mike Riley disallowed the effort for a shirt pulling offence by Diouf on Richards in the build-up.
Sheringham went close a minute after the break when he collected the ball out on the left and flashed a low drive just wide of Dudek's far post.
The withdrawal of Diouf on 57 minutes brought on Baros to partner Owen up front - but Poyet almost scored twice for the visitors.
First the Uruguayan hooked a first timer from 12 yards which Dudek saved superbly, and then from the corner, Poyet's header was kicked off the line by Hamann.
Vladimir Smicer was introduced for the flagging Gerrard on 67 minutes but five minutes later Danny Murphy sent them into the lead with a curling 25-yarder which sailed past Keller, after receiving the ball from Hamann.
Smicer was booked on 73 minutes for disputing a free-kick, and two minutes later Ferdinand took over from Sheringham for Spurs.
With 10 minutes to go Spurs then brought on Milenko Acimovic for Poyet and the Slovenian provided a fine piece of skill on the left to create space for a cross which Richards headed home from six yards on 82 minutes.
But Liverpool's response was dramatic. Owen surged down the left, cut into the box and was sent flying by Carr.
The last time Owen was fouled in the box at Anfield against West Brom, he missed the resulting penalty. This time he kept his nerve and drilled the ball home.
After the match Reds manager Gerard Houllier praised England striker Michael Owen.
'Michael showed a lot of strength of character to take that penalty,' Houllier said.
'It shows that at 22 he can do that - it was not an easy penalty to take.
'We weren't 5-0 up. It was a penalty in the last minutes against a very good
team; it was a credit to him.'
Spurs boss Glenn Hoddle also hailed Owen - and confirmed he had no problems
with the penalty decision against Carr.
Hoddle said: 'The lad is so quick, I wouldn't blame Carr for that. It was
just a reaction tackle - there was no doubt about it being a penalty.
'Michael Owen, in fact, was the difference between the sides. We worked hard
to keep him quiet, but he got beyond our back line only a couple of times and
from one he got the penalty that beat us.'
Hoddle added: 'Liverpool have a very good chance of winning the title.
'They showed they can grind out a result, and this was a very good result for
them with what happened elsewhere on the day.'
The Spurs boss did think his team might have been a little unfortunate to fail
with two penalty appeals - particularly a handball offence against Jamie
Carragher.
He said: 'I've seen the TV replay, and it looked a good shout. Some you get;
some you don't. But I'd like to see what the referee would have done at the
other end!'
Houllier was simply delighted with his team.
'Don't ask me whether we deserved it - of course we did,' he said.
' Don't ask me about the others and what they did - we are only concerned
about ourselves.
'When they equalised we didn't let our heads drop. They seemed to drop back
when they scored, but we kept going forward because we knew we could win the
game.'