BIRMINGHAM council is breaking the law by refusing to review the support for children with special needs when they begin secondary school, Education Secretary Charles Clarke ruled this week.
Mr Clarke found that the council was acting illegally by denying parents the right to appeal to a tribunal to challenge their child's statement of need.
Special needs groups say that the practice is particularly damaging for pupils in mainstream schools who have no additional support, such as teaching assistants or equipment that they need, because of "out-dated" statements.
Around 500 pupils, including those with severe disabilities such as autism, are affected every year.
A spokeswoman for Birmingham council said: "We can confirm that we have received a letter from the Department for Education and Skills and have five days to consider our response."
John Wright from the Independent Panel for Special Educational Needs Advice (IPSENA) said it was unlikely that parents who had been affected would be able to sue.
Mr Clarke's decision comes as official figures show appeals by parents of pupils with special educational needs are increasing at the fastest rate since Labour came to power.
Special needs groups claim that councils are rationing help according to parents' ability to fight for their children's rights and that the rise is a result of local authorities attempting to evade their responsibilities.
More than 3,000 parents in England and Wales registered appeals in 2001-2, an increase of 11 per cent, according to official figures. This compares to a little over 2,000 appeals in 1996-7. The annual report of the SEN and Disability tribunal, published this week, shows that just 14 cases were brought during the first four months in which schools were covered by the Disability and Discrimination Act (DDA).
Mr Wright of the IPSENA, which assists with more than a third of tribunal cases, said: "More authorities are refusing to assess as a knee-jerk response. It is almost a part of standard procedure for some LEAs not to assess children until parents lodge an appeal with the tribunal."
He added that the small number of cases brought under the DDA was a result of errant schools acting quickly when made aware of their responsibilities and the fact that admission and exclusion cases brought under the Act are dealt with by different tribunals.