The Institute of Public Policy Research study will call for limits on fixed-term exclusions, and will highlight the vast number of illegal exclusions that have become a "day-to-day reality" in many schools.
The report says that longer exclusions - pupils can be excluded for up to 45 days - do not solve the problem of poor behaviour. Children find it difficult to re-integrate into classes when they return. And, if they are not at school, they are often free to get involved in criminal or anti-social activities.
The report will argue that it is possible to move towards a system where very few pupils are excluded from school, but says the Government must make sure the necessary support is in place.
Teachers' leaders said the proposal was unworkable. Chris Keates, general secretary of NASUWT, the second-largest teaching union, said aiming for zero exclusions "has been tried, tested and shown to have failed".
She said: "It is naive to think you can eliminate exclusions. To keep in school a child who has pulled a knife on a teacher, or assaulted staff or pupils, undermines discipline and authority."
David Hart, general secretary of the National Association of Head Teachers, said he would vigorously oppose any move to limit heads' freedom. "Three days is hardly worth the paper it's written on," he said.
The draft report seen by The TES said that pupils who are temporarily excluded often benefit from increased kudos with their classmates and view the time as a holiday. This can reduce the impact when pupils are threatened with permanent exclusion, it suggests.
Welsh Assembly figures published this March showed an increase in fixed-term exclusions from nearly 14,700 in 2002-3 to more than 16,500 in 2003-4. Most (14,402) were for five days or less, and the average time lost was 3.7 days per pupil. Permanent exclusions were down 19 to 420.
A working group appointed by the Westminster government last week is investigating introducing a national code for behaviour and will look at the issue of exclusions. It will report in October.