Janet Allan, the principal, told MSPs last week that charges for a day student at the 54-pupil school would increase from pound;10,880 to pound;27,200. Some authorities would be unable to pay after being advised to limit increases to independent special schools to 2.5 per cent, forcing some pupils to withdraw. “This difference is unbridgeable,” she said.

Donaldson’s College is recently back on the rails under its new principal after a special investigation by HM Inspectors into its care and welfare systems and educational standards. It receives almost pound;1.2 million directly from the Scottish Executive to provide day and boarding provision for deaf pupils, and 40 per cent of costs are met by local authorities.

Mrs Allan told members of the education, culture and sport committee that the direct grant, if spread around councils as envisaged by ministers, would mean pound;35,000 for each. But the money was not ring-fenced and councils could decide not to support pupils.

Ministers are taking their lead from the Riddell inquiry into students with severe special educational needs. This found some “national centres” were providing mostly locally-based services.

But Mrs Allan said parents had a right to a choice and valued the specialist provision after seeing their children suffer in mainstream schools. Many pupils were better equipped for later life by an education in a specialist school.

“Many deaf youngsters in mainstream are bullied and isolated and have self-doubts about their own worth,” she said.

Mark Macmillan, a Donaldson’s boarder from Dumfries, confirmed he had found conditions impossible in mainstream secondary school. Using an interpreter, he said everyone at Donaldson’s could use sign language. “When I was in mainstream, no one could sign, so how could I communicate? I had to communicate through writing. At breaks and lunchtimes, all my hearing friends went into groups and I felt very isolated,” he said.

Bart McGettrick, chairman of the goverors at the Craighalbert Centre, the Cumbernauld-based centre for children with impaired movement, called for ring-fencing of money to national centres in the first few years of a new funding regime.

“The educational case for maintaining this provision in Scotland is a very strong and important one. The funding arrangements need to be looked at with care and transitional arrangements should be in place in the interests of children and parents,” he said.

Conductive education experts south of the border spent most of their time looking for money instead of focusing on frontline services. “I would hope Scotland does not end up in that position,” said Professor McGettrick, the head of Glasgow University’s education faculty.

Sandra Kerley, director of children’s services with Capability Scotland, feared schools such as Stanmore House, Lanark, may become small residential resources and lose their day pupils without a sympathetic future funding agreement.

But Danny McCafferty, the local authorities’ education convener, said he was opposed to ring-fencing on specific aspects of special educational needs. He did not rule out some agreement with national centres, although their costs were rising substantially.

National centre spokesmen attacked the current records of need system for failing to inform parents of the range of choices. Records could take up to two years to open. Professor McGettrick told MSPs in their investigation into special educational needs there was a need to ensure parity of provision across Scotland by setting up a national recording system.

Frank Newall, head of children’s services in West Dunbartonshire and a local authorities’ adviser, called for records to be scrapped as they differentiated the 1-2 per cent of pupils with records from the remaining 18 per cent of pupils who also required extra support.

“I think we should move to a system that is much more simple, transparent and less adversarial,” he said. Authorities favoured a national register for SEN pupils, backed by individual education programmes, regularly reviewed.

Mr Newall said local authorities were building their own mainstream support systems but envisaged a continuing role for special schools.