Spanish World Cup winners Pedro Rodriguez and David Villa grabbed two goals apiece with compatriot Xavi Hernandez, one of three players shortlisted for the Ballon D'Or crown, netting the other as Barcelona triumphed in the Catalan derby, and opened up a five-point lead over second-placed Real Madrid.
Barcelona signed off 2010 in the perfect fashion, ending Espanyol's 100 percent home record emphatically with a 5-1 thrashing and putting pressure on Real to win their game-in-hand against Sevilla at the Santiago Bernabeu on Sunday.
Real have won all seven of their home matches in the league while Sevilla's confidence is rock bottom after four successive league defeats.
Espanyol had a perfect seven wins and were flying high in fourth, however, Barcelona turned in a mesmerising display making it a remarkable 26 goals in their last five league matches with a drubbing of their local rivals to maintain their flawless away record with an eighth win.
"My team never cease to surprise me," purred Barcelona coach Pep Guardiola. "Espanyol had only conceded two goals at home in the league before this match and it isn't a coincidence that they are up near the top of the table.
"It is a great night for us because not only did we beat our local rival, but we also beat a very good team."
Barca should have scored in the eighth minute with Dani Alves setting up Lionel Messi, but the Argentine somehow fired over the goal to let Espanyol off the hook.
Messi made amends on 18 minutes by creating the opening goal with Pedro showing neat control to lay the ball off and Messi fed a incisive pass back into his team-mate's path. Pedro raced clear and showed great composure to drill home.
The hosts were carved open again on 29 minutes as Barcelona released Xavi on the right. The playmaker watched as his centre ricocheted back to him and showed great technique to drive a volley into the opposite corner.
Barcelona made the running after the break and made it 3-0 close to the hour mark with Messi again the creator.
The Argentine dribbled at incredible speed to leave three opponents in his slipstream and goalkeeper Carlos Kameni spilled his shot which allowed the alert Pedro to prod in the rebound.
Pablo Osvaldo quickly pulled a goal back for the home side, but Villa registered his tenth and 11th league goals of the campaign on 75 and 83 minutes to cap a memorable win.
It was an extra special night for Barcelona star Andres Iniesta who was warmly applauded by the home crowd that remembered his touching world Cup final tribute to former Espanyol captain Dani Jarque - who died of a heart attack on August 8, 2009, at the age of 26.
After scoring the extra-time winning goal for Spain in the final, Iniesta lifted up his jersey to reveal a t-shirt for his close friend Jarque, declaring: "Dani Jarque, always with us".
In other matches, Valencia took advantage of Espanyol's defeat coming from behind to win 2-1 at promoted Real Sociedad on Saturday.
Argentine midfielder Tino Costa scored a terrific equaliser before Aritz Aduriz grabbed a stoppage time winner as Valencia moved above Espanyol into fourth.
Earlier on Saturday, Villarreal maintained their impressive unbeaten home record with a 3-1 win over Real Mallorca at El Madrigal to secure third place for the festive break.
Villarreal made it 23 points from a possible 25 at home and Juan Carlos Garrido's side move five points clear of fourth-placed Espanyol.
Elsewhere struggling Sporting Gijon salvaged a point with Diego Castro scoring an 89th minute equaliser in a 1-1 draw at Deportivo La Coruna on Saturday.
Sporting will be happy with the point having not won in the league since mid-October and stay second from bottom of the table.
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