A poor second half performance and some costly defensive errors proved too much as Everton were well and truly beaten by their neighbours and rivals Liverpool after the first half ended even.
Jack Dunn opened the scoring for the Reds and on the stroke of half time Welsh schoolboy international Gethin Jones fired home an equaliser.
Some heroic goalkeeping from Connor Roberts including a remarkable penalty save two minutes from time made the score line a more respectable one at the final whistle.
To add to the misery, blues captain John Lundstram was shown a straight red for a two footed challenge with studs showing during the latter stages of the second half.
Everton arrived at Liverpoolâ€™s academy in very poor and wet conditions this morning for this rescheduled fixture due to the seniorâ€™s involvement at Wembley on Sunday in the Carling Cup Final.
Everton made one change from last weeks win at home to West Brom by leaving Anton Forrester on the bench who sustained a foot injury from that victory, in his place Gethin Jones was introduced.
As was the reserve derby on Tuesday the first 15 minutes lacked opportunities for both sides with the ball zipping across the slippery turf.
Ben Heneghan made an uncharacteristic error on 17 minutes by playing the ball back to his keeper unaware of an onrushing opponent tracking him, but thankfully Roberts was able to help his colleague with a clearance.
Liverpool were in the faces of Everton by forcing a couple of corners then finally broke the duck on 26 minutes after Ryan Higgins took a throw in which failed to find a team mate.
Liverpool picked up on the possession with the ball finding Jack Dunn 25 yards out which was placed with power past Roberts from 25 yards out to give the hosts the lead.
Roberts the blues keeper kept Morgan from doubling their advantage as they caught Everton on the counter but the advancing Roberts saved with his knees.
Jordan Ibe the match winner from the reds last outing at Blackburn last week should have done better with a downward header from a Dunn corner which gave Everton another let off.
Thomas on Evertonâ€™s right was doing well to threaten with some nice balls across to Hope but was nothing was going Evertonâ€™s way although they did manage to get the ball into the back of the net with Jones playing his part and Hopeâ€™s effort being ruled out.
5 minutes from the break Everton deserved an equaliser with a nice pass and move which was instigated by Jones. He then released Thomas who crossed perfectly for the onrushing Hope who met with a low diving header that just went over the top of Belfordâ€™s goal.
Roberts again was Evertonâ€™s saviour as Peterson set up Morgan but Roberts was equal to it and keep the deficit to one.
But just on the half time whistle a duplicated move as 5 minutes earlier, Lundstram set up Hope who obliged Jones from 25 yards who made no mistake to get the game on level terms with the visitors finishing the half strong.
LIVERPOOL U18â€™S 1 EVERTON U18â€™S 1
After a strong end to the 1st half Liverpool got themselves back in front inside the first minute after an attack down the right with Ibe assisting Morgan who rounded the keeper with ease to hit home.
The goal worked well for the home side but signs showed where the Everton defence were uneasy and not looking comfortable as heads seemed to drop after conceding the second goal.
Liverpool looked the more threatening of the two teams and looked quite capable of increasing their lead.
Forrester entered the field in place of Kelly who was very disappointing today trying to add some spice up front with the hard working Hope going out wide.
Disaster struck on 62 minutes after poor defending which Liverpool took advantage of with Johns losing possession and leaving a gap as the tormentor Ibe cut inside the 6 yard box to find Morgan who got his second of the game and make things a lot more difficult for Everton to find a way back.
The game exploded just after the hour when Lundstram went fiercely into a two footed challenge but the referee thought it wasnâ€™t appropriate with studs evident and had no hesitation showing a straight red.
Everton therefore had to make a tactical change immediately by bringing creator Thomas off and bringing on fit again Jordan Barrow who has just returned from injury.
Duncan Ferguson was making himself heard from the touch line making the players aware he was unhappy with events.
Jones who was Evertonâ€™s best outfield player had to leave the field injured with 20 minutes remaining being replaced by Molyneux, was sorely missed as the game was coming to a close and Liverpool should have got another couple of goals.
Another blow for Everton 2 minutes from time as substitute Hatch was brought down by Roberts to be awarded a penalty which summed up Evertonâ€™s day.
Morgan who was on two goals stepped up to take the penalty hoping to take the match ball home was denied by Robertsâ€™s right hand as he went down to the left to save the teamâ€™s blushes once more.
Overall the second half was bitterly disappointing which lacked the spirit of the 1st half. Jones had a good game for the toffees as did Thomas especially in the first half, Hope ran and worked his socks off but no doubt it was Roberts who takes the award for man of the match with some quality goalkeeping and only for him the margin would have been greater.
LIVERPOOL U18â€™S 3 EVRTON U18â€™S 1
Liverpool team: Belford, McLaughlin (Hatch), Regan, Rafferty, Baio, Ibe, Dunn (Mukendi), Morgan, Peterson (Nacho), Lussey. Unused subs: Ward, Sokolik
Coach Mike Marsh
Booked Lussey 64 mins
EVERTON; Roberts, Higins, Johns, Pennington, Heneghan, Lundstram (C), Thomas (Barrow 67), Grant, Hope, Jones (Molyneux 70), Kelly. Unused Subs: Fitzgibbon (GK), Waring
Booked Jones 60 mins, Sent off 65 mins, Hope 70 mins
Sent off Lundstram 65 mins
Coach Kevin Sheedy