Students with special education needs are "grossly over-represented" among students who are being informally removed from schools, a new report by YouthLaw Aotearoa says.
It says families are often informally persuaded to take their child from a school and it is not reflected in formal statistics.
Education Minister Hekia Parata said in August that student stand-downs, suspensions and exclusions were are their lowest level in 16 years.
But Jen Walsh, a solicitor and author of the report, said that did not paint the real picture.
She says there has been a dramatic rise in the caseload related to informal removals since 2013.
The findings are based on YouthLaw's own case work and a national survey which elicited 53 responses.
A lot of its case work is with students with autism or ADHD.
The report is not claiming to be quantitative and Ms Walsh says better research is needed to monitor informal removals.
The report recommends the establishment of an appeals tribunal similar to one in Britain that has the power to direct schools to reinstate students or direct them to take different measures.
The report also recommends better guidance for schools to ensure that students with special educational needs are reasonably accommodated in mainstream schools.
Walsh said schools were "culturally incentivised to perform."
"Students who don't easily fit within that norm become difficult to manage within that performance structure and it can mean they are subject sometimes to additional disciplinary processes or informal processes."
Allan Vester, the chairman of the Secondary Principals' Council, said he would not be surprised if there had been an increase in the number of students informally removed with special education needs.
"Schools really, really struggle to manage those students," he said.
"What is sometimes forgotten in the debate is certainly the students with special needs should be looked after but when a school is not funded to look after them adequately, then there is a real tax on education for every other student.
"Everyone else's education in the class is diminished to some extent if the teacher has not got extra support for that student with needs and they spend a lot of their time dealing with that student."
YouthLaw was an advocate for the individual student.
"Whereas the schools are often making the judgement 'if we keep this student here, this is the effect it is going to have on every other student we've got.'"
He believed the Ministry of Education was well aware of the issue. It was really an issue of funding.
Additional support for schools was needed.
Up to 50,000 students a year are directly supported through special education grants which was $37 million in the year ended June 2014, and was part of $586 million spent by the Government that year on additional learning support for up to 100,000 students.
Ministry of Education deputy secretary Kim Shannon said every child had the right, under New Zealand law, to attend their local school if they choose to do so.
Students could only be removed from school or kura for behavioural reasons when the school followed the correct process as set out in the Education Act.
"Schools sometimes face extremely challenging behaviour from a very small number of children and young people," she said.
"When they take action it is almost always in the interests of the safety of other children, teachers and the child whose behaviour is a concern.
'If a school suspends, excludes or expels a child usually it is only done after a number of other things have been tried - and in by far the majority of cases very sound processes are followed.
