More than 40 per cent of children in pupil referral units (PRUs) are not receiving the support they need for mental and emotional problems, a survey funded by the Department of Health has found.
Children - many of whom have been sexually abused or have parents on drugs - are being let down by government mental health and social work agencies, the research reveals.
Some 261 young people in six PRUs were surveyed by the National Children's Bureau.
The results, seen by The TES in draft form, are due to be published later this year and present a "worrying" lack of communication between social and health workers, preventing disadvantaged and vulnerable young people from getting medical help.
This is leading to children "showing their distress" by becoming prolific young offenders, self-harming, abusing drugs or engaging in "dangerous" sexual activity.
PRU staff told researchers that their efforts to help children are being hampered by the fact that many of the children are remaining with their families rather than being taken into care.
The survey found that 41 per cent of children in PRUs are not getting the right support to cater for their needs and half are only receiving partial help. As a result, the health and development of 62 per cent of those children are being affected "in a significant way".
Researchers praised teachers for the "imaginative" ways in which they are trying to help pupils, but warned that the children's prospects are "likely to be extremely poor" if doctors, counsellors and social workers do not do more.
The biggest unmet needs were poor relationships between the child and adults, poor parenting, and loss and trauma.
"There is a marked lack of clear multi-agency planning and this is especially worrying in view of the range of need among the children and their parents," the report says.
"Given the seriousness of children's needs, and the gravity of children's stories, it was remarkable that the researchers found all six PRUs to be calm, industrious places where children were respected and their achievements celebrated.
"In some ways, they can be seen as victims of their own success in that their ability to engage with children and to address the needs that they present within the PRU appears to act as a deterrent to multi-agency involvement."
Former government behaviour tsar Sir Alan Steer is concerned that children with mental health problems who are expelled from school will become involved in "drugs, crime and prostitution" because they are not given the right support. He is particularly worried about children who are out of school but not in PRUs.
"In some areas, we have a situation that is hard to describe as anything but scandalous," he said.
"We have excellent provision in certain places. In other parts of the country, we have children who are out of school, receiving as little as one hour a week of home tuition, week after week, month after month."
Jacky Mackenzie, head of Somerset's PRU and secretary of the National Organisation for Pupil Referral Units, said the report was "welcome".
"This is the first serious look at the complex needs PRU teachers have to deal with," she said. "It is clear children are not getting the support, but we can't do more for less.
"We are very concerned about the impact of public spending cuts on these very vulnerable children."
41% - Percentage of children in PRUs who do not get the right support
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GOVE CALLS FOR ACCOUNTABILITY
Education Secretary Michael Gove wants voluntary groups and academy sponsors to take over pupil referral units.
In an interview, Mr Gove described PRUs as "the weak link in the chain, without an accountable person responsible for making sure these children progress."
This description angered the National Organisation for Pupil Referral Units, which represents heads and teachers. It wrote to Mr Gove to complain.
Government officials met with the heads of outstanding PRUs in the summer of this year to question them about the reasons behind their success.