Disability lobby group IHC is suing the Ministry of Education Ministry over alleged breaches of the Human Rights Act.
It says lack of funding and other policies prompt schools to discriminate against children with special needs by discouraging their enrolments, refusing to take them all day or excluding them from some activities.
IHC's director of advocacy Trish Grant says there are almost daily examples of children not getting a fair deal at their local school.
"Not being allowed in the door in many cases, not getting the kind of support that they need to be taught well, being sent home at lunch time, not being able to go on school camps."
Berhampore School principal Mark Potter supports the IHC's action and says because of the ministry's policies and systems some of his colleagues actively discourage disabled children from enrolling.
"They won't say 'you can't come' but they will actually, by practice, make the parents aware that that child might not be supported that well with them."
The Wellington principal says schools know it is hard to get enough resources for special needs children and some prefer not to enrol them.
Parents 'made to feel unwelcome'
Parents spoken to by Radio New Zealand say principals have deliberately made them feel unwelcome to discourage them from enrolling their children.
They say some schools have failed to provide trained teacher aides to work with their children and put unreasonable and even illegal conditions on their children's attendance. They say the ministry has been little help and hope the IHC's court action will lead to an improvement.
Vanessa O'Sullivan has a child with special needs and believes families should not have to fight the education system on behalf of their children. Ms O'Sullivan supports the legal action and says families need more help from the sector.
"A lot of these families are struggling because of the varied diagnoses that these children have. And then to have to go out and fight for, rightfully, what is your child's right is demoralising. A lot of families just simply don't have the energy or time or know-how or resources to do it."
Ms O'Sullivan says she has had to fight to ensure that her son is appropriately educated.
In a statement, the Ministry of Education says 95% of children with special education needs are enrolled in mainstream schools and are doing well. The ministry says it wants to meet with the IHC to work through the problems.
The IHC has been trying to take the case to court since it lodged a complaint with the Human Rights Commission in 2008.
In 2011, the commission's Office of Human Rights Proceedings agreed to take the case to the Human Rights Review Tribunal but earlier this year said it would prosecute individual schools, but not the ministry. The IHC says that was not acceptable and it has decided to pay for the case itself.