Rodolfo Borrell's men could not recapture the form that saw them overwhelm Fulham on the opening day of the Academy league campaign and they were ultimately undone by the pace and power of an imposing City side.
 
The early stages of the match had been evenly contested with a combination of the visitors' physical approach and the windy conditions frustrating Liverpool's attempts to play football to feet.
 
Andre Wisdom and Conor Coady looked impressive at the back as they battled to keep a lively Leicester frontline at bay, although the front two of Lauri Dalla Valle and Krisztian Adorjan struggled to make an impression on the proceedings.
 
Neither side had a chance of note until the 20 minute mark, but when the visitors finally cut through the Reds defence, they manufactured an opening that should have resulted in the opening goal of the game.
 
A flowing move down the left saw Craig King send a low ball across the six yard box. Elliot Chamberlain somehow missed his kick under pressure from Coady, leaving John Jorrin to arrive unmarked at the far post. Fortunately for the Reds the winger could not find the finish, as he skewed a disappointing effort well wide of the near post.
 
It served as a taste of what was to follow with Chris Oldfield doing well to gather at the second attempt following a fierce strike from the edge of the area by Adi Yussef.
 
The warning signs were there for the hosts and it was Leicester who continued to ask all the questions. A weaving run from Jeff Schlupp was finally halted by the outstretched foot of Wisdom, only for Yussuf to pounce on the deflection and fire in a shot that was somehow kept out by a combination of Oldfield and Coady.
 
Liverpool were beginning to buckle under the pressure and on 35 minutes the away side finally got the breakthrough their first-half performance deserved. A corner from the left was only half-punched clear by Oldfield, allowing Jorrin to hoist the ball back into the six yard box where Tom Parkes out-jumped a cluster of players to nod Leicester ahead.
 
It was a setback for the Reds, who suffered a double blow when Oldfield was stretchered off seconds later following a collision in the build up to the goal. It meant Liam Jacob was once again called upon to take his place between the sticks, capping an eventful week in which he also featured for the Reserves at Blackburn Rovers.
 
It wasn't long before he was right in the thick of the action either, doing well to hold Jorrin's dangerous free-kick before pulling off a miracle stop to deny Chamberlain, with Jorrin crashing the rebound against the post.
 
Tame efforts from Adam Dawson and Dalla Valle were the best the Reds could muster in a first-half that belonged to the Foxes.
 
Indeed, the visitors could easily have been well out of sight by the interval, but with just the one goal in it, the Reds restarted the contest hoping to step up a gear or two.
 
A tactical substitution saw centre back Stephen Sama replace Dawson, but despite Liverpool's best efforts, it was Leicester who looked the greater threat.
 
The Reds survived a flurry of dangerous set pieces as they looked for a way back into it, before Cian Bolger powered in the visitors' second just shy of the hour mark.
 
Jacob was then forced to turn aside Yussuf's 25 yarder while Tom Ince and Cooper both saw shots blocked as the home side looked to get a foothold in the game.
 
With time running out it was the visitors who looked the more likely and Chamberlain rubbed salt in Liverpool's wounds on 76 minutes when he arrowed his drive into the corner from Ben Milnes' short free-kick.
 
Liverpool under-18s: Chris Oldfield (Liam Jacob 36), John Flanagan, Matthew McGiveron (Jack Robinson 64), Conor Coady, Andre Wisdom, Alex Cooper, Craig Rodden, Adam Dawson (Stephen Sama 46), Tom Ince, Lauri Dalla Valle, Krisztian Adorjan. Unused subs: Marcus Giglio, Michael Ihiekwe.