The Dutchman has conceded that a defeat in Sunday's derby will all but finish off his side's challenge for a place in Europe's top competition next season.

Louis van Gaal has conceded that defeat for Manchester United in Sunday’s derby against Manchester City will spell the end of his side's hopes of finishing in the Premier League’s top four.

United heads to the Etihad Stadium looking to eat into the four-point gap which separates it from fourth-placed City and the Red Devils boss accepts that a ninth league loss will end the club's chances of qualifying for the Champions League.

“I think so, yes,” Van Gaal told reporters when asked if the fixture was a "do or die" affair. “The gap is four points already. And there is also West Ham United, because they are ahead also. So it is not just City, it is also West Ham United. Seven points is too much, I think.”

Manchester United goes into the clash with its local rival smarting from its Europa League exit at the hands of Liverpool on Thursday.

The 1-1 second-leg draw at Old Trafford rounded out a 3-1 aggregate loss to the Merseysiders and Van Gaal concedes that his side has underachieved in its struggle to improve upon last season's fourth-place finish.

“We actually wanted for third place, because last year we were fourth and you always want to be better,” he added. “But so far we have underachieved. There are factors behind that though.”

United currently sits sixth, with a number of players due to make returns from injury soon. Van Gaal, however, believes the short turnaround following Thursday’s European clash will add a further complication on Sunday.

“My players will start their recovery [after the Liverpool game] but I don’t know how they will be,” he said. “Now we have to do the same against Manchester City as we did against Arsenal on short rest.”

Manuel Pellegrini’s men have also underperformed of late but still claim an interest in the Premier League title race. The 2013-14 champion currently sits 12 points behind surprise leader Leicester City with one game in hand.

United has lost its last two visits to the Etihad, with Robin van Persie’s injury-time strike securing a 3-2 victory in the Red Devils'last triumph in December 2012.