Suad is a princess. She has on a gilt crown, the earringest earrings and a huge ring on her middle finger. Tiring of all of these, she begins to rub her palms in thickly-mixed powder paints, blue and red and green. After making a few desultory handprints on paper, she asks permission to put the paint on her face.

Even when it’s granted, she hesitates. Then she tentatively begins to dab paint on her chin, then her nose, then her cheeks until she’s rubbed it all over her face. For a moment she is exhilarated, whooping and jumping with the thrill of it. “I’m dirty, I’m dirty,” she screams. “Look at me.” Then her pleasure turns to terror. She begins whimpering like a frightened animal. “I’m bleeding. My mother will kill me.” Next she says she wants to kill herself.

Psychotherapist Camila Batmanghelidjh stands her on a chair in front of a mirror in the staff lavatory at Winton Primary School, central London, so she can watch as she cleans the paint off with tissue and water. Suad grows calm watching her face emerge, staring at herself in an oddly adult way, the crown still sideways on her head. For a rare minute, she is quiet.

It’s play but it’s also therapeutic. Camila Batmanghelidjh is on a mission to bring child psychotherapy where she says it’s needed most - on to school premises. Her charity, Kids Company, was set up earlier this year to bring not only counselling but also activities such as art, music, drama and football to deprived children who, she says, are slipping through the mental health net. She believes this “socially intelligent” option is cheaper and more effective than traditional approaches to emotional and behavioural difficulties.

Suad, for instance, is chaotic and “challenging” in class and there are suspicions of sexual abuse. She was referred to child guidance but the family did not turn up for appointments. She is making progress after two months of the weekly sessions at school. “At first she was frenzied. She would shout and trample and knock. I’m trying to show her that if she gets a grip on the circumstances, she can manage them,” says Camila.

The Kids Company room, half the size of a classroom, is freshly painted. The toys are new and desirable, the Barbies’ hair still gleaming, the Cinderella glass coach wheels and doors intact. Nothing in the room is shabby or insufficient, because these children have enough of that elsewhere in their lives. But in the play sessions, no holds are barred. The dolls can be strangled, the water spilt.

Thirty-year-old Camila, trained at the Tavistock Institute but also with a degree in theatre studies and dramatic arts, makes the ideal playmate. “I’m very childish,” she says. “You can find me in here being a patient, being a monster. I have no inhibitions at all.”

The approach, she says, is more effective than traditional psychotherapy. “A lot of these children are very afraid of eye contact. If they can split it with a toy receiving both our attention, they don’t feel so terribly watched. They can talk more.”

Camila Batmanghelidjh, from a Belgian and Iranian background and founder of the innovative Place To Be project, which also provides therapeutic support to children in schools, cuts a flamboyant figure in the playground of Winton School, with her bold brooches, her earrings out of the dressing-up box and her flowing red scarf. Children of all sizes and ages hurl themselves at her as she makes slow progress across the tarmac. Some simply say hello, some want a cuddle and some try urgently to arrange a private talk about something that’s worrying them. “It’s never nothing,” she says. “I’ve never had a child self-refer and not need it.”

Winton, where Kids Company has been working since September, has its fair share of needy children. The 270-pupil school is tucked behind King’s Cross station in an area notorious for prostitution and drugs. “It is a hard area,” says headteacher Jane Fulford, “and there’s an underlying tension in children. They show it in different ways. Lack of concentration is one of our biggest problems.”

Not all the children need therapy. But in an area where it’s risky to play outside, and with money for hobbies scarce, most can benefit from the lunchtime clubs. Kids Company offers activities ranging from computers and football to puppets, fine art, video games and inventing. Nearly all the juniors are attending something, in small groups of up to eight. The benefits can be felt in the playground, says Jane Fulford. “It has cut down on the aggro at lunchtime. The dinner helpers are happy.”

Kids Company has a two-pronged approach. Although the charity offers one-to-one counselling, some children get enough support and enrichment from the activities on offer in the lunchtime clubs. “I wouldn’t go in just for therapy,” says Camila Batmanghelidjh. “The lunchtime clubs are of equal importance.”

She believes that club membership can help children feel better connected to themselves, their peers and the school. “The ethos is to encourage attainment, and a sense of belonging.”

Each club, which takes up to eight children, is run jointly by a counsellor and a specialist in the subject with the emphasis on fun and co-operation. “I don’t want any miserable therapists,” says Camila. “I normally give them a football test, or let them loose in the playground.” Children who need further help - such as one-to-one counselling - may be spotted in the clubs, referred by teachers or refer themselves.

There is no secrecy about the counselling aspect: Camila explains the project in an assembly when Kids Company begins working in a school. “I say I want to hear from children who don’t feel good about themselves, who are bullied or who bully. I explain that it will be confidential, unless they’re in danger. And it gets straight through. This is the remarkable thing about children, they have enormous understanding about these things.” The self-referrals usually begin immediately after that first assembly.

To work in a school, the charity needs the support of the head and staff, and a contribution of Pounds 4,000-Pounds 5,000 a year. It is currently working in three schools, and has 10 permanent staff backed up by part-timers and volunteers. In Winton School - where costs are met partly from the special needs budget, the rest from fundraising - Kids Company has a full-time co-ordinator and sees children round the clock for 50-minute counselling sessions. They are picked up from class, brought to the session, then returned to class. “There’s no extra work for anybody, which is a huge plus,” says the head.

Camila Batmanghelidjh would like to change the whole approach to children’s behavioural problems. The current debate about teaching morality, she says, completely misses the point. “Children need to understand what feeling things is. Some have huge gaps in their emotional comprehension. That can’t be taught, it can only be given back through experience.”

She has the backing of parents and children. Thirty-six-year-old Vera Chambers, a single parent, lives opposite Winton with her three children. “If they are unhappy, children should able to speak to somebody,” she says. “We as adults are always telling them to sit down, keep quiet, not to do this or that.”

Her daughter, nine-year-old Kaiesha, goes to an art club once a week. “In the playground you’re either hurting yourself or getting ticked off or it’s boring,” she says. “In Kids Company there’s loads of things to do and if you didn’t have anyone to talk to in your family, then you’ve got someone there. ”

Camila Batmanghelidjh says she gets resistance not from families but from teachers. “Teachers are the biggest saboteurs. They’re anxious about whether the child is talking about them, or if the counsellor thinks they’re good enough, or they think bad children are getting rewarded. The bulk of the work is negotiating with the staff on the child’s behalf.”

For more details of Kids Company activities, and the forthcoming schools pack, write to: Kids Company, co 40 Barforth Road, Nunhead, London SE15 3PS.