A recent ruling by a court in Baden-Wurttemburg has pit the family and youth authority responsible for the welfare of the child against the schools authority, which says there can be no exceptions to compulsory schooling.
The family authorities are beginning to allow exemptions in the interests of the child.
Late last year the court in the small southern German town of Emmendingen dismissed a case against the Becker family for educating their four children aged 15, 12, 11 and 7 at home since returning from abroad in 1997.
The Beckers refused to pay a fine levied by the authorities for breaking the schools law.
Cases against four more homeschooling families nearby were dismissed.
"The court has shown that it is on the side of the children and supports the parents," said Dorothee Becker, the mother, who now runs a support group for home-schooling parents. There are now 70 families openly teaching their children at home in the state.
The ruling has forced families, many who home school for religious reasons or because they have seen it in action while working abroad, to come out int the open. However the vast majority continue in secret.
"It is like the Bible groups that had to operate underground in China, only we are a democracy," said one mother who is teaching her two children aged seven and nine in the Berlin area.
She tells the schools authority that the two, who are asthmatic, are too sick to go to school.
Official attitudes vary from state to state and court to court. In North Rhine Westfalia a judge recently ruled for children to be taken into care, although this has since been overturned.
The case of Renate Leuffen in 1994 has frightened many parents. Leuffen educated her gifted son at home for religious as well as academic and social reasons. However a German court removed her parental right over his education, appointing an educational supervisor to enforce her son's attendance at school. She was also sentenced to two months prison, suspended while she took her case to the European Court in Strasbourg.
When the Strasbourg judges ruled that the woman's own local law had precedence, she fled with her son to London where she continued to home-school him and where the Haringey education authority provided a glowing report of the boy's education.