Blackett, making his first start since September, sliced a Franck Moussa cross into his own net after 63 minutes to hand the Shrimpers an advantage they never surrendered.
His howler was the defining moment of a match that promotion-chasing Posh dominated, yet they finished with nothing.
Darren Ferguson's men needed only six minutes to hit the front when Dean Keates made no mistake from the penalty spot, but they were pegged back by a sensational Jean Francois Christophe leveller against the run of play in the 24th minute.
The Frenchman guided a 15-yard overhead kick into the corner before the visitors' turnaround was completed by that moment for Blackett to forget.
Posh began brightly and it wasn't long before they hit the front with a helping hand from referee Alan Haines.
He pointed to the spot when George Boyd hit the ground under attention from Anthony Grant and Dorian Dervitte. Keates coolly converted from 12 yards before Posh failed to convert plenty of presentable chances to double their advantage.
Craig Mackail-Smith saw one effort blocked by Peter Clarke before scooping a second opportunity over.
The home side were stunned when Southend's first threatening passage of play resulted in Christophe's spectacular equaliser.
Posh still held the upper hand as Lee saw a deflected effort drop agonisingly wide before Tom Williams, back after a ten-week absence following a knee operation, stung the palms of Southend stopper Steve Mildenhall from range.
But an action-packed opening period was followed by a far less dramatic second half during which disaster struck for Blackett.
Then Theo Robinson was only inches from adding a late third for Southend with a blockbuster that ended up on the roof of the net.