It's cheaper to educate children with moderate learning difficulties in mainstream than special schools, according to the Newcastle University report.
Their education is also marginally better in mainstream schools - but the evidence for this is far from overwhelming, and more work is needed relating outcomes to costs, say the researchers.
The report, produced by the university's special needs research centre, highlights huge variations in the costs of educating MLD pupils both within and between education authorities and the different settings.
While recommending further national research, it says decision-making could be improved now by schools and education authorities monitoring how resources for MLD children are deployed - and how well they do as a result.
MLD pupils constitute one of the larger groups of pupils within special needs - and account for a significant proportion of costs. Some are statemented but many are not, and they can be found across the full range of provision, from special schools to mainstream.
The research - commissioned by the Department for Education and Employment to supplement its work on the special educational needs Green Paper and action programme - compared costs in 33 schools from eight education authorities.
It found that the costs of similar pupils can vary considerably from school to school. For example, the price of support for pupils with mild difficulties ranged from pound;1,700 to pound;9,700, and for children with more severe problems from pound;2,300 to pound;10,000. Special school costs for pupils with mild difficulties were on average 80 per cent higher than for mainstream placements.
Transport costs accounted for more 37 per cent of the variation between the two settings. Other variables included school resource and staffing levels, the cost of external services such as educational psychology, and dual provision - for example, mainstream school or college placements for special school pupils.
'Costs and Outcomes for Pupils with Moderate Learning Difficulties in Special and Mainstream Schools,' Research Report 89, ISBN 0 85522 913 6, is available (price pound;4.95) from DFEE Publications, PO Box 5050, Sudbury, Suffolk CO10 6ZQ, telephone 08456 022260.