Celtic were beaten 3-0 in the first Old Firm clash of the season, with Nacho Novo scoring twice on his return to the Rangers line-up and the outstanding Ferguson also on target.

Ferguson said: "We're not going to kid ourselves. The last two years Celtic have won the league at a canter because they've been the best team.

"We knew we were up against it, they're still a fantastic team and they're still favourites, but I think it'll be a close call this year."

The result moved Rangers level on points with Celtic, who had several key men missing and were not helped by a lacklustre display from Shunsuke Nakamura.

Ferguson told BBC Radio Scotland: "We were delighted to get three points today, that was the most important thing, because if they'd won the game obviously they'd have gone six points ahead which is a big lead at this stage of the season."

The big games keep coming for Rangers' Scotland players, such as Ferguson, who also skippers his country.

Today's game came on the back of Scotland's Euro 2008 qualifiers against Ukraine and Georgia, and Rangers' next match is against Barcelona in the Champions League.

"There's a quiet game on Tuesday!" Ferguson added.

"But that's what it's all about, playing against teams like Barcelona full of fantastic players, but that's why you want to be a football player, to play against the best."

Rangers manager Walter Smith was pleased by the victory for his team but insists they are not yet a finished work.

Smith overhauled his squad in the summer and is confident there is room for improvement from Rangers.

He told Setanta: "We need a bit more. As a team we're trying to progress just now. We have to start to show we can play at a better level in terms of possession of the ball.

"At certain periods of the game, after we went 2-0 up, we gave an awful lot of needless possession of the ball to Celtic when we should have done better ourselves.

"But that's been something we're trying to work on. It's a fault we have at the present moment."

Celtic boss Gordon Strachan declined to speculate on whether Rangers' goals were soft, insisted he would need to review replays.

He admitted: "The better team won. We had a few chances but it's a surprising game because Artur (Boruc) has not made a save. Their goalkeeper has made one or two.

"But the game is all about scoring goals and winning the ball, and the team that does that best is the team that normally wins.

"We did make chances but didn't take them. They made chances and took them."