The 38 youngsters live in the catchment area for Dorothy Stringer and Varndean schools and wanted to go there from September.
Instead, they were told that they would have to go elsewhere as the two popular secondary schools were full.
Now, after a campaign supported by all three political parties on Brighton and Hove City Council, money has been allocated to enable the two schools to take extra children.
Councillor Dan Chapman, who chairs the council’s Children, Young People and Skills Committee, said: “I know that families want the option of a place at their catchment area school.
“This came across clearly during the recent consultations on school admissions undertaken by the council.
“With the proposed new secondary free school not now going ahead, we have more capital funding available for the city’s existing schools.
“We will be working with our schools to manage the citywide increase in secondary pupil numbers over the next few years.”
When the council’s Policy, Resources and Growth Committee met last week, members called for extra places to be created at Dorothy Stringer to help accommodate the “misplaced 38”.
Stringer head teacher Richard Bradford said: “The school’s governing body have held the interests of the families in our catchment area in mind and have wanted clarity and stability throughout the long-running discussions about catchment areas.
“The school is already modifying its plans for this September and is working with council officers on the necessary changes to our infrastructure.”
The council said that it had always done its best to offer catchment area places to those who requested them but had never been able to guarantee them.
Next week the council would run its reallocation pool, giving places that have not been taken up at secondary schools across the area to families on waiting lists.
The council said: “The reallocation process uses the same admissions priorities as for the initial allocation back in March.
“So children living in a catchment area will have a higher priority than other children.
“It is anticipated that some of the ‘misplaced 38’ families will be offered places at their catchment area schools through this process.
“For those ‘misplaced 38’ families who aren’t offered places through the reallocation pool, the council will ensure that they are offered places at either Dorothy Stringer or Varndean through a separate process.
“An urgent meeting of the Children, Young People and Skills Committee will also be held to review how the council will use the £15 million that had been earmarked for the new school, including further enhancements to both Varndean and Dorothy Stringer schools.
“A date for this meeting will be agreed as soon as possible.”
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