Campaigners say the case of Joanne Spendiff, 12, of Wallsend, could resolve an argument going back to 1981 when a policy change decreed children with special needs should be sent to ordinary schools wherever possible.
Despite the integration ideal and opposition from parents, many local authorities have continued to send children to special schools and have been backed by special needs tribunals.
The Independent Panel for Special Education Advice, which is backing the latest case, says authorities often cite get-out clauses in the law. They say that they do not have the facilities in mainstream schools to cope with the child, that it would cause disruption to other pupils or that it would be an inefficient use of resources but do not investigate the individual circumstances or explain their reasons.
Joanne's parents mounted the High Court challenge after losing their appeal at a special needs tribunal that she should be allowed to go to St Thomas More high school in Wallsend rather than the Parkside special school.
Joanne had been to a mainstream primary school since the age of three and her parents say it would be emotionally damaging for her to be separated from her friends. They say she is well able to cope with normal school life given some support. They have been educating her at home since September.
Last week the authority told the High Court that for Joanne to go to a mainstream school would be "prejudicial to the effective education of other children".
The court heard Joanne was "horrified and distressed" when the local authority announced in February last year that the best way of overcoming her learning difficulties was a special school place. The parents' appeal was dismissed by the special educational needs tribunal last July.
The family's lawyers argued that the tribunal had ignored an educational psychologist's advice that forcing her to leave her friends and go to the special school against her will posed "a real danger of educational and emotional regression".
Joanne's mother, Patricia, said: "Joanne may have learning difficulties but she can cope very well in an ordinary school with some support. The move to a special school would be very traumatic and emotionally devastating. We have visited the special school and we don't think it would provide the stimulation she needs."
Katy Simmons of IPSEA said: "Many local authorities are excluding children from mainstream schools without going through the process of demonstrating that the school is not suitable.
"We are hoping the judge will clarify the law and show what local education authorities should do to demonstrate that they have fulfilled their obligations."
Linda Shaw, co-director of the Centre for Studies on Inclusive Education, said: "This is an important case because if it is successful it will make it easier for families who want disabled children to be educated in the mainstream to achieve that.
"At present many families are forced to send disabled children to separate special schools against their wishes."
Mr Justice Hidden reserved his decision in the High Court in London and said he hoped to deliver his ruling within two weeks.