A Bedfordshire school discriminated against two Asian brothers last year by calling police after the children were given plastic toy guns as presents.
Central Bedfordshire Council has admitted the school would not have called police if a white child had received a toy gun.
Teachers at the school – which has not been named – claimed they were following the government’s anti-terrorism ‘Prevent’ guidance.
The boys’ mother said: “To this day, I cannot fathom why a teacher who has known my family for years would suspect terrorist activities based upon a plastic toy gun.
“Our only distinguishing feature is the colour of our skin.”
The incident happened in March 2016 when the elder boy aged seven told his teacher that he and his five-year-old brother had received toy guns as presents from their parents.
Notes by teachers made it clear they understood the gifts were toy guns. But despite this, the headteacher contacted Beds Police.
Teachers isolated the boys for 90 minutes and denied their mother access to them until officers arrived. Police were led through a packed school event with the boys seen trailing behind.
Upon hearing the allegation, police dismissed it.
The boys’ mother said: “I was utterly humiliated by this experience but more importantly my sons were confused and terrified.”
The school claimed the older brother had shown signs of “changing behaviour”. This included false claims he had been speaking Arabic and that his father had taken him to a mosque.
It emerged neither boy speaks Arabic and they have never been to a mosque. Their father is a non-practising Muslim and their mother is a non-practising Hindu.
Following legal action by Liberty, Central Bedfordshire Council (CBC) admitted the school breached the boys’ Human Rights on three counts.
A CBC spokesman said: “We apologise for how the two boys were treated. We accept that they were discriminated against and have apologised to the family and agreed to pay compensation.
“Following this incident, all schools have been reminded of their safeguarding responsibilities and the importance of following council’s guidance.
“Schools are encouraged to deal with incidents at a local level, meaning that only the most serious are escalated.”
The boys’ mother added: “I’m relieved the Local Education Authority has admitted the school were racist, but the Prevent duty needs to go.”
In Bedfordshire, the Prevent strategy has previously drawn criticism from Luton Council of Mosques, who accused the scheme of breeding mistrust of Muslims and causing fear in the community.
Debaleena Dasgupta, Liberty legal officer and solicitor for the children, said: “There were absolutely no grounds to believe the children were at risk of radicalisation. They fell foul of the Prevent duty purely based on the colour of their skin.
“It’s encouraging that this LEA recognised the school would never have called the police if a white child had received a toy gun, and has committed to improving its Prevent processes.
“But while the Government continues to compel teachers to view pupils with suspicion, we will continue to see incidents like this. Schools should be places of learning which encourage children to speak openly, not silence them. Prevent isn’t working. Ministers must learn the lessons of this case and revoke the Prevent duty in schools and subject the wider strategy to a full and independent review. To do anything else is to condone ongoing discrimination in our classrooms.”