Live peer-to-peer (P2P) streaming has become a promising approach to broadcasting non-interactive streaming media content from a server to a large number of interested clients. It still faces many challenges, however, such as high churn rate of peer clients, uplink bandwidth constrains of participating peers, and heterogeneity of client capacities. This paper presents LSONet, a collaborative peer-to-peer streaming framework for scalable layer-encoded bit streams. For achieving higher streaming quality and resilient to peer churn, this paper employs a mesh-based data-driven scheme for partnership formation, and proposes tow algorithms, optimal transmission policy (OTP) and graceful degradation scheme (GDS), for multi-layers allocation. Extensive simulations show that LSONet achieves higher quality of service thanks to peer-assisted streaming and layered video coding. Also, through comparison, results show that the system outperforms previous scheme in resource utilization and control overhead.