Manchester City are 14 points behind unbeaten Premier League leaders Liverpool as their hopes of a three-peat fade.
Manchester City manager Pep Guardiola will target the Champions League as Liverpool run away with the Premier League title, according to Xavi.
City are eyeing a third consecutive Premier League crown under Guardiola, however, the defending champions are third and 14 points adrift of unbeaten rivals Liverpool – who have a game in hand – after 20 matches.
Amid doubts over Guardiola's long-term future in Manchester, former Barcelona star Xavi believes the Spaniard will prioritise the Champions League ahead of a blockbuster last-16 showdown against Real Madrid.
"Pep is a born winner," Al Sadd head coach Xavi, who played under Guardiola at Camp Nou, told The Mirror. "It will hurt him that Manchester City are so far behind Liverpool in the league - and he won't give up.
"He will be realistic though. The gap is a big one and at the moment it doesn't look likely that they can make it three titles in a row.
"With that in mind, I think there's a big chance Pep will prioritise the Champions League.
"They will be two big games coming up against Real Madrid - and maybe there will be a chance to rest players before these games that they wouldn't have if they were in a title race.
"Pep will want to win every trophy that he can - but if you'd asked him at the start of the season what he would prefer, I'm sure he would have said the Champions League.
"He joked with Klopp that maybe Manchester City and Liverpool should swap trophies this year - but there was some truth in that joke, I think.
"He's won every trophy in England with Manchester City and he knows that winning the Champions League with them would take them to the next level as a club."
Guardiola's City will kick off the New Year with a clash against Everton at the Etihad Stadium on Wednesday.