Confusion surrounding the Disability Discrimination Act means children are turned away when they shouldn't be, according to Mencap's national children's officer, Lesley Campbell.
She said: "The legal side of it is incredibly complicated. In terms of policy it is relatively straightforward - settings that really want to accept disabled children find a way through this."
The 1995 act says it could be discriminatory to refuse children for not being toilet trained if this is linked to disability.
But the legislation allows settings to block admission to any child who is not toilet trained by arguing that changing nappies is not an "efficient use of resource".
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