The draw put Lyon through to the knockout stages and they were joined by Sevilla, who were held 1-1 by VfB Stuttgart but assured of a top-two finish in their group when Rangers drew with Unirea Urziceni.
Barcelona's hold on the trophy which they won in such style last season loosened ever so slightly when they were held 0-0 by Russian champions Rubin Kazan.
Indeed Inter Milan's late comeback to gain a 2-1 victory over Dynamo Kiev in Ukraine sees the Italian side go top of the tightest group. Should Barcelona and Kazan finish tied for second place on points it would be the Russian outfit who progress by virtue of their head-to-head record.
Liverpool had bossed the first half against the seven-time French champions with Fernando Torres, Dirk Kuyt and Andriy Voronin all going close.
They looked set to come away with all three points when Ryan Babel struck a stunning opener late on but Lyon broke their hearts when Lisandro Lopez struck with minutes remaining.
Fiorentina's 5-2 romp at home to Debrecen - begun by Adrian Mutu's early goal - has really turned the heat up on Liverpool.
Liverpool manager Rafael Benitez, who has come under increasing pressure and who has now seen his side win just one of their last eight games, believed that things had not gone fairly for his injury-racked team.
"We deserved to win and to concede a goal in the last minute is really unlucky," said the Spaniard.
"But the team showed character given our problems and they were really positive. "Can we pull off a great escape? Yes, we will."
Lyon's highly-rated coach Claude Puel was relieved and delighted to have reached the knockout stage from one of the tougher groups.
"We have mastered the art of writing particular screenplays throughout the season," said the former Monaco and Lille tactician.
"We were very courageous till the end in order to equalise and to qualify this evening."
Barcelona coach Josep Guardiola said he never thought it would be easy in Russia, especially in temperatures that reached as low as -5 degrees Celsius, but accepted that his side had to get maximum points from their final two matches.
"We looked better in the first half but later in the match Kazan played creative football and could have won," said Guardiola, who guided Barcelona to an unprecedented treble last term.
"The draw is a good result after such a match but now we need to win both of the remaining matches."
His Russian counterpart Kurban Berdyev was more than satisfied.
"We hoped to repeat our performance at Camp Nou (when they won 2-1) and in general we were successful," he said.
"We also created some chances against the world's best club but unfortunately missed them."
Inter's charismatic coach Jose Mourinho was immensely proud of his runaway Serie A leaders, who have failed to translate their domestic form onto the Champions League stage over the past few seasons.
"It was a fantastic performance, with heart, emotion, desire and unity," he said.
"I've done some quick calculations and I think that nine points will be enough (to qualify for the last 16). We have six, we need three more."
Arsenal are all but through after a 4-1 victory over Dutch champions AZ Alkmaar.
Gunners manager Arsene Wenger was full of praise for his side and singled out Russia playmaker Andrey Arshavin.
"It was a brilliant performance. We dominated technically, tactically and were never under threat. We played with confidence and overall I'm very happy," he said.
"Arshavin was outstanding. He gave the ball every time at the fraction of the second you wanted to give it. That is top, top quality.
"I believe this season we are getting stronger from game to game. It is important to keep that attitude to progress and improve."