Kent County Council had reached arrangements with a number of parents to share the cost of private tuition which was needed to meet the child's special needs. But these were ruled unlawful by Mr Justice Turner who said that Kent was wholly liable for the fees.
He also described as unreasonable the LEA's refusal to pay anything once the plaintiff, a 17-year-old dyslexic girl, had entered the sixth form.
The court was told that the child had "flourished" since 1992 when the local authority decided that she should attend a private school near her home. But her parents were obliged to re-mortgage their house to meet their share of the fees under Kent's scheme.
Special needs campaigners fear that Kent's arrangements are part of a growing move by local education authorities to determine spending priorities according to budget limits rather than the child's needs.
The 1981 Education Act says that the needs should be paramount - until the point that they prejudice the efficient education of other children. But with special needs budgets growing rapidly, despite an overall context of severe restraint, local authorities now feel that such a point has been reached.
LEAs are introducing tight new criteria on a national basis that must be met before they will part with money for statements of special educational need - formal promises of additional help. Schemes devised by both Cumbria and Hampshire have already survived legal challenges. These match categories of need - for example a specific learning difficultydyslexia - with predetermined financial settlements.
Families of children with special needs are still waiting for a judgment from the House of Lords on the question of whether they have the right to sue education authorities for a lack of care under Common Law. This would treat education authorities in the same way as the health services. The Court of Appeal had ruled that education authorities do owe a duty of care.