The council failed to act when the boy, who has behavioural difficulties, was allowed to attend school for just one day a week after being excluded for fixed periods in years 8 and 9.
His mother was unable to appeal because he had not been formally excluded and the council ignored her requests for him to be placed at a specialist independent school. It also refused to follow an educational psychologist's recommendation that he should be reassessed.
A spokesman for Stockport Council said the boy had clearly been let down and that an action plan would be put in place to review current procedures. "There were genuine attempts to work with the family but unfortunately this did not meet the young person's needs," he said.
The ombudsman has now ordered the council to create a special fund equivalent to three years' basic wages for a 16 year-old, plus three years' college fees that will be made available if the boy returns to education in the next 10 years.
