While Tyrese Shade handed the young Foxes the lead on 25 minutes, they went into the break level after Jonathan Afolabi’s equaliser at the Club’s training ground.
Enzo Robise put the Saints ahead in the 71st minute before Afolabi’s second in added time subjected Trevor Peake’s men to a fifth reverse of the campaign.
As a result, City are now down to fifth in the Premier League U18 South standings, two points adrift of Swansea City and four away from Southampton in third.
While Leicester are 14 points behind leaders Chelsea, the young Foxes are scheduled to travel to Cobham Training Centre in March.
As well as that crunch clash in Surrey, second-placed Arsenal will host City in Colney in April meaning Peake’s talented squad still have an opportunity to close the gap at the summit.
You can follow the Academy squad’s progress with regular updates on LCFC.com between now and the end of the season.
City: Davies, Elewa-Ikpakwu, Ughelumba, Gill, Heaven (c), Trialist, Tee, Myring (Edwards-John 45), Thomas Husek 78), Leshabela, Shade.
Subs not used: Stolarczyk, James, Meite.
Goal: Shade 25