Manuel Pellegrini's Manchester City have a 'mentality problem' - Neville

Manchester City's failure to sustain success is evidence they have a "mentality problem," former Manchester United defender Gary Neville said on Sky Sports.

City's diminishing hopes of defending their Premier League title took a significant setback on Monday night as they lost 2-1 to Crystal Palace at Selhurst Park.

Goals from Glenn Murray and Jason Puncheon condemned Manuel Pellegrini's side to defeat, leaving them fourth in the table and nine points behind leaders Chelsea, who have a game in hand.

Neville, who won eight league titles with United, said: "They have got a mentality problem, there is no doubt about that. This team cannot sustain success, and I think that is a terrible thing to have levelled at you.

"When you win championships you have got to be able to come back again with hunger and they do not. They drop off it. They get to the top of the mountain and drop off it.

"Ultimately they couldn't break a resolute, resilient defence down against Crystal Palace. Chelsea had that problem last season many times, it cost them the league.

"It has cost City tonight. They just did not have enough to break them down. I do not think they have enough quality when they get it to wide positions.

"I do not think [Jesus] Navas is doing it for them. [Edin] Dzeko and [Sergio] Aguero up front as a partnership, is it a partnership? Sometimes it works, sometimes it doesn't."

"This is a talented squad, along with Chelsea the best squad in the league. They should be pushing them all the way in the league.

"They are falling well short of where they should be. Make no mistake about that.

"We said three, four months ago, 'it is now or never for this team.' They cannot progress beyond the last 16 of the Champions League, they cannot sustain success by winning back-to-back championships, they are getting older and their average age is the highest in the league.

"Unfortunately some of those lads are not going to be there next season. That Manchester City team, with the ambition and quality they have, should be doing better than that."

Former Liverpool defender Jamie Carragher, who works alongside Neville as a television pundit, added: "We are watching a great team in the Premier League coming to the end. It has to change. They have been a poor team in Europe. It's finished now.

"The situation they were in, before FFP came in, I had visions of them getting the best young players around our country and in Europe, and they would be ready to step in. They haven't got anyone there.

"Pellegrini said they haven't got anyone there to come through, so they have to spend again.

"I think it is so poor from those at the top of the club, it is mismanagement from them."