Education officers have been censured for asking a primary school volunteer to approach the neighbour of a special needs pupil for evidence about her welfare.
Newcastle-upon-Tyne council has agreed to pay the pupil's mother pound;150 compensation after the local government ombudsman criticised its action.
The girl's mother only learned of the enquiry weeks after it happened, when the neighbour told her she had been asked if she shared the fears about her daughter's welfare.
The eight-year-old girl, called "Kate" in Ombudsman Patricia Thomas's report, had a statement for learning and behavioural difficulties.
She had been withdrawn from school after her mother alleged Kate had twice been sexually assaulted by another pupil.
The girl was said by another neighbour - also a voluntary worker at the school - to cry long and loud at home and to have been locked out in the rain. He told teachers Kate's crying was so loud it could be heard through the wall.
The school then contacted Newcastle's education welfare service, which decided there was not enough evidence for a formal child protection inquiry.
However, it asked the volunteer to contact one of his neighbours whom he believed would have heard Kate's crying.
He was told simply to pass on the welfare service's phone number. But the second neighbour later complained the man had told her he "represented the education department" and had told her about the abuse allegations. She said she did not share his fears.
Mrs Thomas concluded that: "The council allowed enquiries about a sensitive matter to be undertaken in a way which was outside its control."
Because the inquiry was informal, the mother was not told of it. That was "very unsatisfactory and a cause of injustice".
The council should pay Kate's mother pound;150 for her time and trouble in complaining.
A council spokesman said the department regretted any distress but had acted on information properly, while assessing whether formal investigation was needed.
The spokesman said the primary concern was the child's safety and welfare, and no confidential information was disclosed.