London - Champions League winner Paul Scholes believes Liverpool could be dark horses to win this season's competition.
Five-times European champions Liverpool will return to the elite event after a five-year absence when they face Bulgarian champions Ludogorets at Anfield on Tuesday and will also play holders Real Madrid in Group B.
Scholes, a member of the Manchester United side that won the 2008 Champions League final, has forecast Anfield will be a tough place for visiting sides.
The 39-year-old, now a pundit for ITV's Champions League coverage, said: "Liverpool are the dark horse of the competition this year.
"Brendan Rodgers (the Liverpool manager) has done a fantastic job. The style of play he's adopted is exciting to watch and the players seem to have taken to him. I feel they will do well with the players they have.
"The big advantage they have is a home crowd. Anfield is always a hostile place to go, which is something Manchester City lack."
Liverpool qualified for the Champions League after a 2013/14 season in which they finished runners-up to Manchester City in the Premier League.
Since then star striker Luis Suarez has been sold to Barcelona, but Scholes believes Mario Balotelli could prove a good replacement.
Speaking about Suarez, Scholes said: "He's a great player, but don't forget they've signed Balotelli who, on his day, can be a match winner too."
City reached the knockout stages of the Champions League for the first time last term and Scholes believes going further this time around will be manager Manuel Pellegrini's priority.
City begin their campaign against 2013 winners Bayern Munich on Wednesday and Scholes said: "Champions League will be their main focus for the season. Their owners will want to see them push on in the Champions League.
"They have a tough group this year, but with the players they have they need to go on to win it, and there's really little excuse not to do well."
Scholes was doubtful, however, whether Arsenal, who face Borussia Dortmund, Anderlecht and Galatasaray, will challenge for the trophy.
He said: "They always qualify and always seem to get through the group. The only problem with Arsenal is when they meet top teams, they don't seem to have the consistent level of mental strength to get through it."
Chelsea have made a strong start to the season in the Premier League and Scholes said domestic honours might be Jose Mourinho's priority.
He said: "Whilst The Champions League is the ultimate trophy for any club team, I believe Chelsea's main objective is winning the Premier League this season.
"If you ask Jose Mourinho what you'd rather win now, I think the answer would be the Premier League."