We are out of title race, says Wenger

City top the table after 1-0 win – and 12-point gap over Gunners is 'too much'

Arsène Wenger last night conceded that his Arsenal team were out of the Premier League title race after a 1-0 defeat to Manchester City left them 12 points behind the leaders.

The Arsenal manager said that the game, decided by David Silva's goal on 52 minutes, was one that his team "had to win" if they were to stay in contention for their first Premier League title since 2004. With City going back to the top of the table, two points clear of Manchester United, who won 2-0 away at Queens Park Rangers yesterday, Arsenal remain in fifth position.

For now, however, Wenger said that this defeat meant that his team could not win the title. "It puts us too much behind," Wenger said. "It was a game we could not afford to lose. If we had won the game the gap would have been six points [to City] and with Jack Wilshere and Abou Diaby coming back we would have had a better squad in the second half of the season."

He was angry that his side were denied a penalty in the 78th minute when the ball appeared to strike Micah Richards' hand in the penalty area. "Robin van Persie is absolutely adamant that it was a penalty," Wenger said.

Asked about the stories circulating on Saturday night that claimed Mario Balotelli had been spotted driving round Manchester wearing a blue Santa Claus suit handing out money, Roberto Mancini said that "with Mario, anything is possible". An official of the club later confirmed that the reports were "nonsense".

Mancini said: "We want to stay top for a long time, not only for Christmas. We want to beat Stoke [on Wednesday]. At the moment they are like Arsenal were, they have won four games unbeaten. Every game is difficult, so it is a big game for us. It's difficult [for Arsenal], 12 points behind us, 10 behind United, it is difficult for them."

If City beat Stoke on Wednesday they will guarantee going into Christmas at the top of the table, the first time they have done so in the top flight since 1929. That season they were three points clear on Christmas Day but finished third, 13 points behind Sheffield Wednesday. And that was in the days when a win was only worth two points.

Mancini said his team had come through a major test of "character". "It was very important to win after [losing to] Chelsea," he said. "We did not deserve to lose against Chelsea but that is football. It was a great game. We deserved to beat Arsenal, we had a fantastic performance as Arsenal are playing very well at the moment. For our character this was a big test and we showed we are a strong team. We know we have to fight other teams."