Tottenham coach Tim Sherwood believes that Sunday’s north London derby has come at the perfect time for Arsenal, giving the Gunners an ideal opportunity to reignite their season.

Arsene Wenger’s side were eliminated from the FA Cup at Sunderland on Saturday, and are almost certain to exit the Champions League after a 4-0 defeat at AC Milan in the first leg of their last-16 tie.

With their place in next year’s Champions League also hanging in the balance, a third successive defeat - against their arch-rivals Spurs – would only deepen the gloom that surrounds the Emirates.

But former Tottenham captain Sherwood, who played in five north London derbies and scored in a 2-1 win over the Gunners in 1999, says Wenger and his players will relish the chance to put their recent woes behind them by dethroning Harry Redknapp’s Lilywhites in front of their own fans.

“This is the game that all of north London waits for, whichever stands you’re sitting in,” Sherwood told London24. “If you’re down then this is a good way to cheer up your fans, and that’s what Arsenal have got to do.

“I think the derby’s come at the perfect time for them. It’s a good game for them to bounce back in, because they need to be coming back into some kind of form as quickly as possible.

“On the flip side they won’t want to play a team like Tottenham I wouldn’t have thought. If you look at our players, there are a lot of easier games they could have had - but it’s one that will excite the fans straight away.”

Spurs go into this weekend’s crunch clash with a 10-point lead over their bitter rivals, sparking suggestions that there has been a shift in the balance of power in north London. But Sherwood feels that it would be a big mistake to underestimate the Gunners.

“We’re all hoping that the tables have turned now but Arsenal have had Champions League football every year for 13 years, which is a remarkable record, so we’ve got to try to emulate that,” he said.

“Arsenal are still a very good side. It’s a transitional period for them and they’ve been very unlucky with injuries. It’s just not happened for them on a consistent basis this year.

“Anyone who understands the game knows that they’ve got very good players and they’re liable to produce on the field at any time, so we’ve got to be very wary of that.

“Everyone always says that the form book goes out of the window on derby day, and it’s absolutely true. Arsenal have got home advantage, and they’ve got Robin van Persie, who’s probably the form striker in the country at the moment.

“We’ll be on our guard and if we’re not - if we don’t perform at anything like we’re capable of performing - we won’t win the game.

“But we go into it positively. We think that we will put on a performance, and if we do that and we get the rub of the green then we’ll come away with something from the Emirates.”

As the coach of Spurs’ development squad, Sherwood has also been impressed by Arsenal’s young star Alex Oxlade-Chamberlain – but he feels the 18-year-old winger has plenty of work to do in the long-term to justify his �10million price tag.

“He’s had the opportunity to play and he looks like a decent player,” said Sherwood. “It’s a good find from Arsenal, because everyone looked at him - but he cost a lot of money and he’s still got it all to do.

“I’m not saying that he’s fulfilled his potential. That’s what he is at the moment – he’s potential. But he’s certainly going in the right direction.

“Everyone knew about him but �10m is a lot of money for someone who’s not going to go straight into your first team.

“I think he’s had more opportunities at Arsenal this year because of the injuries. He’s been fortunate in that regard, but he’s certainly done well when he’s been in the team.”

Follow me on Twitter @BenPearceSpurs