Barry Lewtas guided his young Reds to glory in the prestigious competition, with the final settled by penalties after a 1-1 draw with Manchester City.
Paul Glatzel stepped up to take the decisive spot-kick and, having converted, prompted joyous celebrations for Lewtas’ charges.
Liverpool had previously eliminated Portsmouth, Accrington Stanley, Wigan Athletic, Bury and Watford to set up the showdown with City.
City led on the night of the final, through Nabil Touaizi, but Bobby Duncan levelled from long range with four minutes of normal time remaining.
Extra-time could not separate the sides, but five perfect penalties from Neco Williams, Elijah Dixon-Bonner, Abdi Sharif, Jack Bearne and Glatzel did.