Only a "small fraction" of children who need mental health support were able to access services last year, the Children's Commissioner for England has said, as she called for every school to have an NHS counsellor available for pupils.
A new report by the champion for young people lays bare some of the difficulties young people face in order to access services in England.
While services overall have improved, more must be done to ensure that children can get the help that they need, Anne Longfield said.
Of more than 338,000 children referred to child and adolescent mental health services (Camhs) last year, only 31 per cent received treatment within the year, the report says.
Another 37 per cent were not accepted into treatment or were discharged after an assessment, and a further 32 per cent were still on waiting lists at the end of the year, it adds.
Central to the issue of access is funding, with local NHS areas spending an average of just 1 per cent of their budgets on children's mental health, Ms Longfield said.
The report sets out how children's mental health services need an additional £1.7 billion a year.
Ms Longfield said that providing help when problems emerge in childhood would reap benefits as youngsters enter adulthood.
It would also help to keep children in school and potentially steer them away from risks such as gangs, she added.
Demand for child mental health services
The report praises progress in some services, but adds: "Yet the rate of improvement is highly variable and ...the increase in capacity is not keeping pace with increasing demand.
"Less than 3 per cent of children in England accessed Camhs last year, a small fraction of those who need help."
Figures released later on Thursday are expected to show a rise in the number of children with mental health needs.
The children's commissioner report adds that of the children who actually entered treatment, only half did so within six weeks.
Data released on Tuesday showed that among adults seeking talking therapy for anxiety and depression, 89.1 per cent were seen within this time frame.
As well as calling for additional money for the service, Ms Longfield added that there should be a large expansion of specialist treatment services made available to children.
Meanwhile, she called for better lower level mental health services to "ensure easy access before conditions deteriorate".
"This should include an NHS-funded counsellor in every school," Ms Longfield said in the foreword of the report.
"I welcome the progress that is being made in some parts of the country and pay tribute to hardworking NHS staff who are delivering improvements to the system.
"However, there is still a vast gap between what is provided for children suffering from mental health problems and what is needed to treat them.
"The current rate of progress is still not good enough for the majority of children who require help.
"I want to see the government and NHS England dramatically increasing the level of ambition for children's mental health services.
"By 2023, the NHS should be in a position to ensure no child who needs help is turned away.
"There also needs to be a focus on early help. An NHS-funded counsellor in every school, providing a service that is accessible and child-friendly, would be transformative."
Paul Whiteman, general secretary of school leaders’ union the NAHT, said: “It is exceptionally concerning that more than a third of children referred to mental health services are rejected.
“Teachers are on the front line for children’s mental health. They see their pupils every day and if they are concerned enough to refer a child for help, they must be taken seriously. Early intervention is vital when it comes to mental health but the thresholds for accessing mental health support for children are too high and waiting lists are too long. Problems don’t just go away when a child is denied help – they only get worse.
“Untold numbers of children are falling through the gaps and not getting the specialist support they need. It just isn’t good enough. Schools are being left to pick up the pieces, struggling to do as much as they can to support children and their families without the expert help which is needed."
An NHS England spokesman said: "As this report recognises, children and young people's mental health services are improving, including rapid service expansion, after decades of under-provision, and the fact is the NHS remains on track to improve access even in the face of growing demand.
"Widening access by 70,000 each year is just the start and the long-term plan, for the NHS will have young people's mental health front and centre, but we cannot do this alone and everyone must play their part to deliver the improvements in full – including the roll-out of new school and college-based support teams."