The Dutch champions stunned their Premier League counterparts two weeks ago with a 3-1 win in Amsterdam to leave Roberto Mancini's expensively assembled side facing up to the prospect of failing to reach the knockout stages for a second consecutive season.
Former Liverpool man Babel believes City have a lack of team spirit, pin-pointing the arguing between City team-mates on the pitch during the first encounter between the two sides last month.
"Against City in the first game you could see the perfect example of a real team effort by Ajax against a team of individuals," Babel is quoted as saying in the Daily Mail.
"We noticed how the frustration got the better of them during the game. And we saw how the players were directing those frustrations towards each other. That is the danger of a club with so many big-name players and so many big egos.
"When the going gets tough, they are not prepared to do the hard work for each other.
"[Manager Frank] de Boer wants us to understand that we can beat the biggest teams with good football.
"We failed when we lost to Real Madrid, but that made it much sweeter when we did it against Man City."