There is a thin line between holding your head up high and having it buried in the sand. For now, Manuel Pellegrini is on the right side of the divide – proud but not deluded.

He knows the drill, he was at Real Madrid where you finish the season without a trophy and you get the sack.

But he believes Manchester City is different. He guided them to a league title he says they got nowhere near enough credit for last season and he wants to keep taking them forward.

Manuel Pellegrini watched his side suffer a huge blow in the title race as they lost to Burnley on Saturday

Pellegrini would have been uncomfortable watching events unfold at Turf Moor

City keeper Joe Hart was beaten by George Boyd as the Clarets took the points on Saturday evening

Pellegrini (left) was in the dugout as his City side were humbled 1-0 by the Premier League strugglers

Pellegrini has a huge task on his hands as he takes his Manchester City side to face Barcelona

He knows they should be in the last eight of the Champions League but that’s tough when you keep on drawing Barcelona in the last 16.

‘Roberto [Mancini] left the club for other reasons, not because he didn’t win anything one year. It’s not “if you don’t win, you’re out”,’ he says of the strategy behind the removal of his predecessor.

‘Of course winning trophies here is extremely important. I understand you can’t just say “it doesn’t matter, we’ll come in fourth or fifth because we’ve got a long-term project”. But in the last four years this team has won two leagues, come second once, and won the FA Cup and the Capital One Cup. I have never felt the situation is that if I don’t win I am out whatever happens.’

Pellegrini won two trophies in his first season in charge. Two more than Louis van Gaal is likely to pick up in his first year.

He doesn’t bite on that particular comparison. But ahead of Wednesday night’s meeting with Barcelona he offers up another contrast: ‘Manchester United in all of that great era under [Sir Alex] Ferguson only won two Champions Leagues. Real Madrid went 32 years without winning the European Cup. It is important to be there in the later rounds but you can’t think that not being there is a disaster.’

City's star striker Sergio Aguero had a frustrating Saturday evening against Burnley

Aguero drew a blank - City have taken just one point from two meetings with Burnley this season

The likes of midfield powerhouse Yaya Toure (left) was also left in shock after City's latest title setback

This is half a call for calm and half a call to arms from Manchester City’s manager. There is no need to panic, there is also no justification for doubting in his ability. He is proud of his record as a coach.

‘Maybe it wasn’t enough at Villarreal that we only got to the Champions League semi-final. I hope someone can do even better at Malaga where we reached the Champions League quarter-finals, or at San Lorenzo where we won the league and broke records in Argentina,’ he says.

And it’s when he’s asked about his playing career that the fire in him really lights. There is even a rare raising of the voice when he talks about days spent as a centre back at Universidad de Chile.

‘If you want to say I was a disaster of a player then say it. But give me another disaster of a player who played almost 500 games across 14 years.’

On Wednesday in the Nou Camp he says the priority is to win on the night and to not fall into the red-card trap again - Gael Clichy was sent off at the Etihad.

‘You can talk about tactics and technique but if you go a man down against Barcelona, you’re put in a terrible position. It is not a disgrace to get knocked out by them. Their squad, if it is not the best in the world, it is the second best. No other team can put together Leo Messi, Neymar and Luis Suarez but I want to play them with 11 and if they knock us out then let that be because they were better than us.’

Pellegrini got his hands on the Premier League trophy but says City don't get enough credit for the success

How the top of the Premier League looks after Manchester City slipped up against Burnley

Barcelona’s 2-1 lead established at the Etihad three weeks ago came courtesy of Suarez, who they bought for £75m in the summer while Financial Fair Play regulations put the squeeze on City and stopped them buying the exceptional player, the ‘crack’, as Pellegrini calls it, that he still believes the team needs.

‘This year we improved the squad while working within those limits. What we did not do was bring in a crack. I think this team now needs a crack, another special player just to give us that sense that we are now at another level.

‘We have [Sergio] Aguero. We have very good players. But the Champions League is very different to the Premier League.’

Last season they won the league but it’s a triumph that Pellegrini believes has unfairly gone down in history as the title Liverpool lost instead of the one Manchester City won.

Luis Suarez (grounded) made a successful return to England when Barcelona arrived at the Etihad last month

The former Liverpool striker (back) scored both his side's goals to give the Catalan giants a 2-1 first-leg lead

‘We were fighting on all fronts. We won the Capital One Cup, reached the quarter-finals of the FA Cup, played in the Champions League and we won the League scoring 157 goals,’ he says.

‘Liverpool only had one competition and that’s an enormous advantage. And the slip from [Steven] Gerrard? They lost that game 2-0, not 1-0. If he had not slipped, does it end in a draw? We’d still have been two points ahead of them. So why was it Liverpool losing the league and not us winning it?’

Is the bar set higher for City because of the riches that have come their way?

‘Perhaps,’ he says. ‘But this year Liverpool, Arsenal, Chelsea and Manchester United have all spent more than us. People don’t accept that we are trying to become a big club in a very short time. I don’t think there’s such a difference between the top five or six squads.’

His domestic managerial rivals would argue with that. What none of them would contest is the need for a mid-winter break. Aside from the long-debated ill effects felt by the national team, Pellegrini believes the fixture list seriously hampers English sides in European competition, especially in the round of 16.

‘December and January are very tough months because of the number of games. You reach an important part of the season and you are not in optimum shape because there is no winter break as there is in other countries.

‘English football gives other leagues an advantage. There are some traditions you can’t change, I realise that. Boxing Day is non-negotiable. But you can’t play nine games in December and nine in January. You have to stop at some point.’

Pellegrini, who turned out for Universidad de Chile, is quick to defend his playing career in his home country

The absence of a mid-winter break is like FFP, another weight that rests disproportionately on English clubs and on City in particular.

‘It’s anti-competitive, it’s absurd,’ he says of the enforced financial restrictions. ‘And meanwhile in Spain you have a club that earns €140m [from TV money] and another that earns €10m. Does that not distort the competition too?

‘There are big clubs with enormous debts and this club has zero debts. Instead of doing what you want to do in six years you have to do it in 14. Why? You are not owing money to anyone.’

Manchester City have pumped investment into the Etihad Campus but Pellegrini warns a Barcelona-style super generation is not going to sprout up overnight.

‘Barça had a lot of players come through together but for the last three or four years they have not produced any for the first team. This club has been committed to bringing through youngsters for seven years now. But if you are taking boys in at 10 or 12 years of age you would normally need at least eight years to start seeing the results.

'When you get one good player come through who makes the first team the club will save £40m or £50m. And that player will come through for sure.’

Liverpool youngster Raheem Sterling (right) would cost £100m, according to City chief Pellegrini

The mentality of perennial winners is another thing that needs time to develop.

‘It’s that feeling a great club transmits that there is an obligation to keep winning. This is a great club in terms of its support but it had gone a long time without being used to winning things.’

There is also a desire to make success sustainable and marry it to a certain playing style.

‘If we were to win the Champions League this season the owners wouldn’t say “right, job done, we achieved what we set out to do.” They want to aspire to win it every season. And not winning the Champions League any way possible, hammering the ball up the pitch or cheating just to win it. You can win it that way once but to have repeated success you need a foundation which is your style of football.

‘You can’t score a goal and shut down the game with everyone back kicking the ball away so you can win 1-0. You’ll be successful sometimes but the Premier League is selling for £6bn and 20 million people watch you in the Champions League. You have to respect that too.’

Pellegrini reckons Wayne Rooney (right) is one of the few players who could take on David Silva's role

Spanish playmaker David Silva (right) is often the man pulling the strings and making Manchester City tick

Some of this may or may not be a reference to City’s biggest domestic rivals and their manager, Jose Mourinho, who Pellegrini has history with.

When it’s mischievously put to him that Chelsea will still drop points and allow others back into the title race because there is a ‘campaign’ against them, he says: ‘Well that comes under the concept of “Anything goes if it means you win”. It creates distrust.’

And stressing that he is not talking about any one team in particular he says: ‘There are coaches and players who are more and more held up as role models. And so behaviour is important. And to have a team that doesn’t play or that is constantly breaking up the play, going for the referee – I don’t think that is the way. You have to look after the image.’

All very well to extol the virtues of fair play but are there not other values that City fail to adhere to? Is there not also a responsibility to maintain an English core to their team?

‘It is important to have English players but can you sign them?’ he asks rhetorically.

‘You are talking about trying to sign players from clubs that won’t sell them. Let’s say you want to buy [Luke] Shaw: £35m for a left back. I’m not sure about spending that much money when we have [Gael] Clichy and [Aleksandar] Kolarov.

City lost Gael Clichy (No 22) to a red card after two bookings in the first leg against Barcelona

‘Can you get [Raheem] Sterling? Maybe if you go to Liverpool with £100m you can. If I want an English player in the position of [David] Silva who is there? Maybe [Wayne] Rooney, but who else?

City do have one English outfield player and to hear Pellegrini talk about him it makes his likely departure at the end of the season all the more unfathomable.

‘It would be very difficult to find a more complete player than [James] Milner’ he says. ‘There are players who are better technically. There are quicker players. There are players who head the ball better. But show me a player who does all the things that Milner does well and there isn’t one.

‘And whatever position I put him in he plays well: at full-back – which is the only place he doesn’t like playing– attacking midfield, wide, or as a striker. I used him this season as a forward and the team was scoring three goals a game.

‘You leave him on the bench and he is furious, but watch him during the game, encouraging and shouting. And in the next training session he kills it for 95 minutes. It’s very difficult to find another Milner – an intelligent player, with big balls and a massive heart.’

Milner was left out of the Burnley debacle but is likely to be involved against Barca and will be in the trenches with his manager for the run-in that Pellegrini says will not turn him into a wreck no matter how intense things become.

The versatile England international James Milner has a huge fan in Manchester City manager Pellegrini

PELLEGRINI THE PRIZE GUY Universidad Catolica Copa Chile 1995 Copa Interamericana 1993 LDU Quito Serie A 1999 San Lorenzo Primera Division 200-01 Copa Mercosur 2001 River Plate Primera Division 2002–03 Villarreal UEFA Intertoto Cup 2004 Manchester City Premier League 2013–14 League Cup 2013–14 Advertisement

‘Any coach who has managed a big club in Argentina can manage anywhere in the world,’ he says.

‘Here the pressure is “normal”. There, it’s every day, and it’s life and death. I’ve never had a problem with pressure because I believe in my own ability. Last year I wanted to show I could win a major league in Europe. This year the challenge is to repeat the title or to do better in the Champions League.’

As a player he admits he was ‘always fighting with everyone’ and making decisions based on emotion.

‘When I made the transition from player to coach, I realised I needed to change completely,’ he says.

‘I was still young, I would fight with players, literally, if it was required. I was 35 years old and you realise that it can’t be like that. If you have young players who need guidance you have to transmit calm and not be acting hysterically on the touchline.’

Some of the old Pellegrini came out last year when City lost the first leg to Barcelona at the Etihad and he verbally attacked the referee for sending off Martin Demichelis.

‘Very few times have I regretted something I said, so much,’ he says. ‘Especially as there are refereeing mistakes that are impossible to understand but when I looked again at the Demichelis incident, it is true he is outside the area, but two centimetres outside the area, in other words a mistake that is perfectly understandable.

Pellegrini attracted plenty of attention on his arrival at Turf Moor on Saturday

‘It’s easy to see it on the television [immediately after the game] and you’re screaming “No it’s not a penalty” and you are still immersed in the match and you explode.’

He says it served to remind him of the hotheaded temperament he had left behind. Perhaps with so much at stake some City fans would like to see a little more fire now?

‘People maybe see it as a defect, to appear to be passive, but it’s not easy to change your personality. It’s one of the hardest things I have done. And being calm doesn’t mean being content,’ he says.

‘And I’m not content, not because of any sort of debate about, “will he go, if he doesn’t win something?” but because my own targets are still there to be met.

‘Internally you have to be strong, externally they can say what they like. The season is not over yet. There is a lot still to fight for.’