Ed Balls, economic secretary to the Treasury, announced the funding package, which covers 2008 to 2011, at a conference on Monday organised by the Every Disabled Child Matters campaign group.
Steve Broach, campaign manager, said: "It's a fantastic result as it is new money for primary care trusts but will be ring-fenced."
The funding includes 280m to provide short breaks for disabled 0- to 19-year-olds. A 35m pilot project will develop appropriate childcare, while 19m will go towards a transition support programme to help disabled young people transfer to adult services.
The funding announcement comes alongside the publication of a review of services for disabled young people and their families, Aiming High for Disabled Children: Better Support for Families. This is one of three sub-reviews by the Treasury and Department for Education and Skills as part of the Children and Young People's Review, which will in turn influence the Comprehensive Spending Review.
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