City tore into Saints from the start with Paul Jones having to dive low to his right to turn a James Scowcroft drive out for a corner.
It was to be a short reprieve for the South Coast club who fell behind in the fifth minute to a controversial penalty.
Les Ferdinand and Michael Svensson challenged for a bouncing ball and referee Mike Riley surprised the whole of the Walkers Stadium by awarding a penalty after ruling that the Swedish defender had impeded the Leicester striker.
Paul Dickov stepped up to score, sending the spot-kick low to the keeper's left.
But there was no doubt about Leicester's second goal after ten minutes.
Scowcroft chased a long free-kick from Ian Walker to the by-line and sent a looping cross into the six yard area. Although strongly challenged by two Saints defenders Ferdinand still managed to get in a powerful header which crashed against the bar before bouncing down behind the goal-line.
The visitors re-grouped and began to edge forward but could make little impression against a City defence superbly marshalled by Matt Elliott and fellow centre-back Ben Thatcher.
And it was no surprise to see substitute Phillips come on at half time as Gordon Strachan sought to inject more firepower into his attack. He almost pulled a goal back on 52 minutes when his header forced Walker into a diving save.
Moments later Phillips was again in the thick of the action, this time scooping a James Beattie knock down over the bar.
But there was no denying Phillips in the 75th minute when he pulled a goal back with a wonderful strike. Fed in midfield by Beattie the Saints number seven turned sharply to shake of Elliott before unleashing a 25-yard drive which flew into the top right corner of the keeper's net.
And four minutes later Saints were level when Phillips prodded a Jason Dodd cross against the post and Beattie reacted quickly to force the rebound home from close range.
But with just three minutes remaining Scowcroft almost snatched a dramatic winner for City when he headed a Muzzy Izzet corner against an upright.