A head teacher says promises to let popular schools expand have come too late for many "bitterly disappointed" families.
Ministers are promising more good schools to go to
Derek Greenup, head of William Parker School in Hastings, East Sussex, said he had many more applications than places this year and would have taken everyone.
But his local education authority forced him to turn people away.
Like many authorities, it says that if places are available in other schools locally, children must go there even if they do not want to.
The example goes to the heart of the debate about giving people more choice, instigated by the Conservative Party and now being promised by Labour.
The Tories have said they would scrap the so-called "surplus places rule". The government says it has gone already - but often practice locally belies that.
In a speech on Wednesday, the Prime Minister, Tony Blair, said his government's plans - being announced in detail on Thursday - included proposals "to expand the number of places at popular schools".
"I think Tony Blair is absolutely right in saying popular schools should be allowed to expand," head teacher Derek Greenup said.
When he came to the school two years ago it had what the inspectorate, Ofsted, calls "serious weaknesses" - at risk of failing.
Pupils were leaving and there was a massive budget deficit.
Two years later under what inspectors call his "inspirational leadership" it had 270 applicants for the 216 available places in its Year 7 intake.
Seven more students were allowed in on appeal, all of them because they had formal "statements" of special educational need, naming the school - one of the key criteria for admission.
"The rest were bitterly disappointed," Mr Greenup said.
"I would have taken them all.
"Having turned the school around - you work really hard and attract people to come here and they are not allowed to."
One of those turned away was 11-year-old Peter Sylvester.
His mother, Sandra, said his current primary school was in the catchment areas for two secondary schools - Robertsbridge Community College, 13 miles away, and Thomas Peacocke Community College, five miles away.
But his heart was set on going to William Parker boys' school, which is seven miles away, because it is a sports specialist and he is a passionate rugby, football and cricket player and already knows children there.
The only place he was offered was at Thomas Peacocke, which has had serious weaknesses, with poor teaching and behaviour.
Mrs Sylvester thinks it odd that the government should talk about greater diversity and choice through its push for more specialist schools when her sports-mad son cannot pursue his dream at the local sports college.
She was told that, in terms of the application process, a passion for sport counted for nothing, "which just seems crazy to me".
"The local education authority is saying we have to send him to Thomas Peacocke because it's our local school."
They appealed to an admissions panel, but without success.
She has written to everyone she can think of, including the Education Secretary, Charles Clarke, who told her he could do nothing.
Her hopes now are pinned on an offer from the local education authority of a second appeal.
She says the whole process has made her son ill and if he goes to Thomas Peacocke she fears he will not achieve as well as he might.
"How can you make a child learn in an unhappy environment?"
Peter Sylvester won his second appeal - along with five other families who also wanted to attend William Parker.
"He is just delighted. He hasn't stopped grinning," his mother said.
"I just think it's a total waste of money and time and effort and stress, especially for Peter - he doesn't need to go through that at the age of 11."