Pupil referral units are being used as cheap special schools, teachers told the conference.
As local authorities close expensive special schools, students with statements are being sent to PRUs instead. But, the teachers said, such units lack the funding and expertise to deal with youngsters with complex needs.
At the fifth national PRU conference, some teachers reported 40 per cent of their students as having statements.
Cathy More, who teaches at the Phil Edwards centre in Croydon, said: "PRUs are being used as special schools on the cheap, but statements of need are not being met in a PRU."
Annie Humphries, president of the new national organisation for PRUs, said:
"There has been a decline in EBD (emotional and behavioural difficulties) schools because they are so expensive. In my experience, PRUs don't have the staffing and support to deal with pupils whose statements cover a wide range of need."
A spokeswoman for the Department for Education and Science said the units ideally should be used only as a transitional placement for pupils with behaviour, emotional and social difficulties. But she admitted students excluded from special schools sometimes have nowhere else to go: "In some cases children excluded from special schools attend PRUs, as they have done something so serious that it is difficult for them to gain admission to another school."