After a bright start to the season City have managed just two wins in their last eleven League games and have dropped down to eighth in the League table.
"It is absolutely forbidden to throw in the towel," the City boss told the Manchester Evening News.
"We must not give up and think the season is over.
"Europe is still there and waiting for us if we take the opportunity. We are trying hard but things are just not happening at the moment.
"I couldn't go into the dressing room and tell the players they didn't put enough effort in against either Wigan or Everton."