Emile Sinclair's goal after just 29 seconds handed Peterborough a dream start to 2012, with the former Macclesfield forward making no mistake from 12 yards to register his seventh of the season as City's rearguard appealed for offside.
The only surprise was that the early opener had looked to be the match-winner in an open Championship clash played out amid an electric New Year atmosphere.
But King's injury-time penalty after man-of-the-match Gabriel Zakuani had been punished for handball ensured both sides went home with a point.
It remained an impressive one for a youthful, injury-hit Posh side who are now unbeaten in five and, while promotion-chasing Blues boss Chris Hughton will be happy with his team's resilience, it could have been a different story had they shown any kind of killer instinct in the final third.
With just two away wins all season and three successive defeats on the road, Hughton insisted prior to the clash "the one thing we need to address is our away form".
And he would have been furious with his side's opening to the encounter as Posh took the lead inside the first minute.
Posh youngster Joe Newell, a former Birmingham youth-team player making his first start of the season, threaded the ball through to Sinclair and, with the visiting defence having stopped in their tracks while they appealed to the assistant referee, the striker had time to slot past Boaz Myhill.
Amid a breathless start to proceedings, only a last-ditch challenge from skipper Steven Caldwell denied Sinclair while at the other end Nikola Zigic fired a great chance into the side-netting when well placed.
Curtis Davies sent a header narrowly over from Chris Burke's corner as the furious tempo continued inside the opening 15 minutes.
Long-range efforts dominated for a period until United 'keeper Joe Lewis was called upon to produce a great stop low down at his near post to keep out Zigic's effort from Burke's cross.
The half-time whistle brought an end to a pulsating first half which saw a total of 12 attempts on goal, 10 in favour of Birmingham - highlighting the visitors' lack of cutting edge in the final third.
Peterborough, looking for a repeat of their dream start, went close to a second within three minutes of the restart as Paul Taylor's rifled effort was tipped over by Myhill.
Boyd was next to test the Welshman from distance before Taylor lashed a powerful 30-yard strike inches wide as the hosts went in search of a killer second.
Zigic, again, fired a wayward finish goalwards before Davies similarly headed another super chance over the crossbar from Burke's corner.
Hughton turned to substitutes Chris Wood and Nathan Redmond in search of an equaliser, but the Blues boss again saw United keeper Lewis come to the home side's rescue as he tipped Keith Fahey's shot around a post.
And Posh looked destined for victory until Zakuani was penalised for handball in added time, leaving King to level matters from the spot.