The headteachers had hoped that the scheme would continue to run until the children already in the system were 13 years old.

Some 2,000 youngsters have been caught in a political trap, which began when the previous Conservative-controlled government extended the APS to free-standing prep schools. Some 120 schools will admit their first and only tranche of pupils under the scheme this September. Last year, the junior departments of senior independent schools started taking their first assisted-place pupils.

Hugh Davies Jones, chairman of the Incorporated Association of Preparatory Schools, sought clarification on phasing out the scheme from the then shadow schools minister, Peter Kilfoyle before the May election. In his reply, dated April 1, Mr Kilfoyle, stated: “If a child has a place at a school which runs to age 13, then that place will be honoured through to 13.”

But the Education Bill now passing through Parliament says that the scheme will end when the pupils are 11 years old, with exceptions made only in the cases of children who live in areas where the usual age of transfer to secondary schools is older than 11.

“We’re feeling a bit let down about this,” said Mr Davies Jones, who is also headteacher of St Andrews, a 400-strong mixed-prep based in Eastbourne which will admit 10 assisted-places children in September.

He felt that the ruling is especially unfortunate because schools such as his offer a wider curriculum to 11 to 13-year-olds than state schools can provide: three separate sciences and French to near GCSE standard, for example.

And Mr Davies Jones said it was likely that parents will have to take their children out of the school if they cannot find the money to pay for the full fees. “We are not like Eton and Winchester - we have no foundation money and no income other than the fees paid by parents. You can’t expect hard-pressed parents to subsidise others,” he said.

But a few parents in Nottingham will be luckier. Chris Parker, head of Nottingham High School, said that “a quirk of fate” meant that around 10 boys a year will continue to be supported once the APS folds.

Years ago, local education authorities gave scholarships to bright youngsters so they could go to independent schools. Kenneth Clarke, the former Chancellor and a Conservative party leadership contender, went to the school thanks to a Nottingham City Council scholarship, and Geoff Hoon, Labour’s under-secretary in the Lord Chancellor’s department, gained one from Derbyshire County Council, Mr Parker said.

In 1970, however, a far-sighted chairman of governors realised that the scholarships might disappear, so he appealed to industry to create an assisted-places fund - a full 10 years before the Conservative government established the APS.

Philip Pallant, head of the feeder prep school to Nottingham High, which is on the same site and has the same DFEE number, said that the new Bill would be particularly hard on parents with older children on the APS who have younger brothers or sisters expecting to follow in their footsteps. He said that parents could face an awful dilemma. Should they let one child continue at the school while depriving the other of the same education, or remove their older child in the interests of fairness?

Mr Parker also accused the Government of reneging on a prerequisite of the APS that meant that only schools that could educate pupils to 18 years old were eligible for the funding, so a prep-school child could reasonably have expected to continue on the APS to A-level.

He further claimed that the 1980 Act required the Education Secretary to give three years’ notice before the scheme could be ended. “We’ve only been given one year,” he said, adding: “In this school the social mix will change upwards. It is not something we want and it’s an odd thing for a Labour government to do.”

Janet Hill, whose son, Edward, nine, is a boarder at Ardvreck School, Crieff, Perthshire, on an assisted place, said the decision had thrown the family into turmoil. They live on the Isle of Bute, off the West coast of Scotland, which has just one state-run primary and one secondary school.

“Edward was not doing very well and he’s quite talented. Luckily we got him an assisted place -it’s the best thing that ever happened. He’s reaching his potential and thoroughly enjoying it.

“We’re farmers and we’ve been hit by the BSE crisis; we can’t afford independent education. We’re worried that Edward might have to leave. We had hoped that his six-year-old brother, George, could join him, but he will be left at home. It is splitting the family.”