Villa are proving to be genuine contenders to break the 'big four' stranglehold in the Premier League and yesterday evening's 2-2 draw at home to the Gunners ensured they maintained a three-point lead over Arsene Wenger's side as they both compete to secure a Champions League berth.

Villa found themselves 2-0 down at home to the north Londoners after dominating the first half and spurning several chances.

But, after goals by Denilson and Abou Diaby against the run of play, Villa regrouped and roared back in style with a penalty by Gareth Barry before defender Zat Knight's stoppage-time equaliser.

O'Neill, who has been given time and money by American owner Randy Lerner since arriving at Villa Park in the summer of 2006, said: "I think that two seasons ago we would have been unable to cope with going so far behind against maybe any opposition, let alone Arsenal.

"So that was really big. I feel the team have made significant progress."

Villa had to do without captain Martin Laursen, and O'Neill revealed the central defender will be out for up to four weeks with a knee injury.

The Villa manager told Sky Sports: "We thought it might require surgery but we're feeling it might settle down and he could return more quickly than if he'd had the operation. We're talking about three or four weeks."

Barry's penalty paved the way for the comeback after William Gallas went to ground when challenging Gabriel Agbonlahor just inside the area.

And Wenger indicated referee Lee Mason was influenced by the partisan atmosphere at Villa Park.

"I know how it works here," he said. "At half-time the referee gets stick and then in the second half every little 50-50 decision goes the other way.

"That's what happened. It's not only here.

"I waited at half-time to see what happened and I was not disappointed."

Asked if he was implying a member of the Villa squad or backroom team influenced referee Mason, Wenger said: "I have nothing to explain more than that."

O'Neill admitted assistant John Robertson asked Mason about a first-half decision - Villa believed Agbonlahor was obstructed moments before Denilson scored - but played the incident down.

"I couldn't give you any response to that. I think the referee must have seen, at half-time, that the decision he gave for Gabby Agbonlahor (before Arsenal scored) was not his best one. Gabby was fouled I think, it was obstruction, and the referee must have been at least three yards away.

"But I didn't tell him on that particular occasion. Arsene Wenger has his own opinion about it and I believe we deserved at least a point, if not all three. Our first-half performance was incredibly exhilarating and a joy to watch.

"John Robertson, I think, spoke to the referee. I think John asked him to explain the decision that Gabby didn't get, that was all. Simple as that.

"He only asked him to explain the decision and the referee chose not to give an answer."

Wenger, meanwhile, admitted his side's failure to hold on for a win was a real blow.

He said: "We are disappointed because we were close to the win and we conceded the equaliser. Especially at that moment, when Villa had not created a lot in the second half.

"They had chances in the first half but in the second they didn't create any chances.

"I believe the turning point was at 2-1, because we lost composure and there was plenty of room to keep the ball much better but we were a bit nervous just to get over the line.

"In the end it cost us."