This was not in the Sheikh Mansour masterplan when he bought Manchester City in 2008. At least, not so soon. A £1bn-plus investment in the club had yielded two of the last three Premier League titles and City were looking forward to dominating English football – and their neighbours – for the foreseeable future.

Yet on Sunday afternoon Manchester United can throw down a significant marker by beating the old enemy in the 169th derby, at Old Trafford. Beyond bragging rights, a victory for the first time in five meetings between the clubs will plant a red flag back in the blue zone of Manchester, and force City to accept that following the aftershocks of Sir Alex Ferguson’s retirement two seasons ago their fierce rivals are resurgent under Louis van Gaal.

Since the 2009-10 season, the year after the sheikh bought City, the club’s net transfer spend is a staggering £521.7m, according to Deloitte. This is more than twice the £206.66m net spend by the Glazers on players for United. Yet as the season enters its defining phase United are in third place on 62 points, a point ahead of Manuel Pellegrini’s team who are fourth. This breaks an 18-month sequence in which United have always been below City in the table.

The last time the 20-times champions headed the current ones was on 23 November 2013, when the Reds were sixth and the Sky Blues ninth. To find the previous day United faced City when above them, rewind two years to 8 April 2013, the final season of Ferguson’s reign. Then, despite losing 2-1 at Old Trafford, they cantered home 11 points ahead of Roberto Mancini’s side as the Scot claimed a 13th championship before stepping away.

Wayne Rooney, the United captain and record scorer in the fixture with 11 goals, has already described Sunday’s encounter as a “massive game of pride”. But there is more at stake. This is a local squabble that could define the wider future for each club. A 50th City victory would take Pellegrini’s men above Van Gaal’s, two points clear, and halt any talk for the moment of the tide starting to turn United’s way again. Yet if the home side claim a 70th triumph a view will form that the noisy neighbours may have to accept gazing up at United once more. City would trail by four points and will have fallen from challengers to Chelsea for the championship to the dogfight for a top-four finish.

Pellegrini’s side have lost their strut just as United have rediscovered their swagger. Monday night’s 2-1 reverse at Crystal Palace was City’s third defeat in five Premier League games and this dismal run has left them nine points behind Chelsea. United, meanwhile, are playing their finest football since that 2012-13 campaign. On Sunday Van Gaal’s team will go hunting for a sixth successive league victory. Defeat City and then Chelsea next weekend and this will match the seven consecutive wins last recorded under Ferguson in spring 2013. There is a recognition of what is at stake.

Bryan Robson, who played in nine derbies for United, is encouraged by what he has seen in recent games but admits that the next two games will go a long way towards shaping Van Gaal’s season. “United are in good form at this moment in time but this is a major test against a team like City,” he says. “And next week there is Chelsea away. So this is a really testing time as far as where they’ve got to under Van Gaal.

“But you’ve got to say that they have been improving and the performances against Tottenham, Liverpool and Aston Villa have been very impressive. Now you’re going to play against two of the best teams in the division. Can you prove that you’ve gone even one step further than what anyone would have thought?”

The winning run has featured wins against Sunderland, Newcastle United, Tottenham, Liverpool and Aston Villa. Suddenly United are the blur of pace and menace that marked out the vintage Ferguson sides. As Robson mentions, the significant displays were the victories over Tottenham and Liverpool, two rivals for a Champions League berth who were given a footballing lesson.

The Van Gaal philosophy is at last making sense, as United perform with clarity and precision. Against Villa last weekend the vein continued. Herrera confirmed his renaissance under the Dutchman who signed him by scoring two fine goals – either side of a sparkling Rooney volley – just as Mata did previously, when registering twice at Anfield.

Mata, after the Villa win, pointed to the fact the team’s ability to move the ball around quickly had been key. “The team performed at a very high level, we fought from the very first minute,” he said. “We tried to use both wings and circulate the ball fast, and that’s how we scored. The team is improving.”

Robson compares the Van Gaal mode of play to that of Ferguson. “It is such an improvement – the performances have been really good because of the attacking flair and some of the sharpness of passing and creating chances which Man United have always been [credited] with, through the old manager.”

Four years have passed since United last beat City before their own crowd in the league. That was in February 2011 when Rooney’s spectacular 78th-minute overhead kick won the match in memorable fashion.

Seven years before that, Jon Macken scored in City’s 4-1 victory, their best result in the Premier League era until the 6-1 hiding handed United by his former club at Old Trafford four years ago. He echoes Robson’s caution regarding whether a power shift can be identified.

“It might be a bit early for that,” Macken says. “Over the last five or six games they’ve done very well. But up to that it was a bit indifferent so maybe it’s too soon. The performance level has increased – that’s the first thing they had to do. And when you get that after five or six games you start seeing a little bit more confidence going to the players.

“That’s what you can see now with Manchester United – they don’t really fear any teams again. Once they do that they’re going to be very difficult to beat. With regards to Manchester City they’ve done fantastically well – but maybe they’re resting on their laurels a little bit at the moment, and thinking they should be winning with the players they’ve got rather than going out and deserving to win.”

Macken, who comes from the city and was at United as a schoolboy, is unsure which side are favourites on Sunday. “It’s a weird one because City were going for the title, they were playing very well a couple of months ago. Now they seem to have dropped off, whereas Manchester United have picked up massively, some of the results and some of the performances – they’ve been fantastic. Especially the win away at Liverpool - it was a great first half and a big win for the team.”

United are eight points behind Chelsea, have played a match more, and have only seven remaining. If the campaign had longer to go would Robson fancy his old club’s chances of overhauling Chelsea? “The title is Chelsea’s to lose,” he says. “But for me, now United have got themselves into this position and with the way they’ve been playing you would be very disappointed if they miss out on the top four.”

This expectation illustrates the new manager’s transformation of United following last season’s dark days under David Moyes. Now is the chance to elevate the Van Gaal project further and ifby 6pm on Sunday United have triumphed fears will grow at City that the old order of supremacy is soon to be restored.