One in 10 of the first specialist schools is being stripped of its status at the first opportunity for failing to meet targets.
The move has prompted cuts of around pound;100,000 to school budgets and staff say the loss has been a bitter blow to teachers, pupils and their communities.
Schools receive pound;100,000 from the Government for building projects and equipment and a further grant of pound;129 per pupil each year when they are granted one of the 10 specialisms on offer.
But they must re-bid for the status every four years and risk losing it, or being put on probation, if they fail to impress a redesignation panel.
Schools are expected to show they have met their own targets for improving academic performance, shared their specialist knowledge with local primaries, and have a good plan for work using their specialism over the next four years. So far 1,700 schools have become specialists of which 389 have reached the end of the first round of the status during the past three years.
Of these, 34 are no longer specialists, mostly because their applications to carry on were unsuccessful, even after appeals. A further six lost their status but have since managed to rejoin the programme after waiting more than a year.
Supporters of the key government programme say the low failure rate shows the vast majority of specialist schools are meeting challenging targets.
Julia Drown, Labour MP for South Swindon, has called for changes to the system since Churchfields school in her constituency lost its performing arts college status (see panel).
She said the redesignation system was based mainly on "crude indicators" such as test scores which do not give enough weight to the work schools do with their communities.
Her claim has been denied by David Miliband, school standards minister, who told a Parliamentary debate that "specialist status had never been for life".
Mr Miliband also revealed that the Government wanted to make it quicker for schools to regain the status in the future. The DfES has already reduced the time a school has to wait before it can reapply from four years to one.
Sir Cyril Taylor, chairman of the Specialist Schools Trust, said that he had been in talks with the Office for Standards in Education this week to see if it could become involved in deciding if specialist schools deserved redesignation.
"Schools aren't getting something for nothing," Sir Cyril said. "You are not going to get pound;600,000 or so over four years unless you can show you can deliver."