[1] Charlie George then scored a winner late in extra time, when his long range effort went past Ray Clemence.
Earlier in the half, Ray Kennedy had caused several problems for the Liverpool defence, and a long range effort from Charlie George also narrowly failed to find the net.
Liverpool's style of play largely consisted of slow, patient attacks, with their first major foray of the half coming in the 58th minute, ending when John Toshack failed to link up with Alun Evans.
The game was briefly paused immediately after this attack, owing to Emlyn Hughes receiving treatment after being hit in the face by the ball.
Liverpool were now having more of the possession, though the next clear chance, in the 74th minute, fell to Ray Kennedy when he received a John Radford cross within the goal area.
The game opened up considerably from this point, and a George Graham header from a Radford long throw hit the crossbar in the 77th minute.
Within a minute, a move which began with Larry Lloyd deep within Liverpool's half found Heighway in space on the left flank.
Two minutes later John Toshack almost made it two, with a sharp reflex save required from Wilson to prevent further damage to Arsenal's cause.
Clemence was forced to make a brave save two minutes from the end of the half after a centring cross almost found Kelly deep in the Liverpool area.
The winning goal was to come moments later in the seventh minute of the period, when a ball from Radford found Charlie George just outside the Liverpool penalty area.
Liverpool were not to give up, however, and the first opportunity to reply came from Chris Lawler, who defied his cramping legs to attempt a flying kick at a pass from Toshack within the Arsenal area.