The day that Lauren Quick, 11, started at the mixed comprehensive in her Yorkshire home town, an older lad stormed into her classroom at break, shouting, "Oi, there's a tranny in here – show me where it is!"

Suddenly, Lauren, who had been insisting from the age of three that she had "a girl brain in a boy's body", was surrounded. She was distraught and, weeks later, made her first attempt to kill herself. Two further attempts followed in the next five months – the last in the school lavatories.

Her life, says mother Jan, had become a living nightmare. Every day, she faced shouts of "man beast" and "tranny" from pupils, as well as calls to "get your dick out" – even, on one occasion, when she was being escorted by a teacher. Lauren's response was to self-harm on a regular basis.

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The town's police hate crimes unit became involved three times after several incidents, including one pupil spitting in her face and a mother who was picking up offspring shouting, "You fucking tranny", through the car window as Lauren walked home from school. Lauren was more often absent than in school.

Although the school supported Lauren's desire to be accepted as a girl, and made determined efforts to stamp out the bullying – taking the perpetrator of each incident aside to explain Lauren's circumstances – one day, everything came to a head. Lauren was ambushed on the way home by older boys, who tried to remove her skirt in an attempt to see her genitals.

Lauren refused point-blank to return to school. Jan obtained a transfer for her to a nearby high school, which had already successfully dealt with a transgender pupil. Lauren lasted only a few weeks. Now 14, she is being educated three days a week in a unit for long-term ill and severely bullied pupils. She would like to go back to school, but she and her mother doubt that it will ever be possible.

"There are no easy answers, but the school was just handling it on the hoof," says Jan. "There was no attempt to plan anything. The school was totally unprepared for dealing with a kid like Lauren."

The deputy head of that school, who still speaks to Lauren on the phone occasionally, agrees. "We were dealing with things that we could not possibly ever have expected. Who teaches you how to deal with a 13-year-old who wants to be a girl, but is having erections in class? We were dealing with each incident as it came up, but perhaps we should have tackled it as a school."

Lauren's story reflects the difficulties experienced by British schools when faced with a pupil who does not fit neatly in to the "boy" or "girl" box. It's not just confusion about personal pronouns, either – even the most mundane problems, such as which lavatories a trans pupil should use and where they change for PE, become major issues.

In Lauren's case, she was not allowed to use the girls' loos, and felt humiliated at having to use the disabled ones, particularly as they were kept locked and she had to ask for the key.

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Looking at her now, making some toast in the family kitchen, she is like any other gangly 14-year-old girl with her dyed, shoulder-length hair, denim skirt and leggings. But she has male genitalia and, by British law, must wait until she is 16 to have medical treatment to give her the body she feels was denied her at birth.

According to figures provided by the Gender Identity Research and Education Service (Gires), one in 1,000 school children suffer from gender dysphoria – roughly one pupil for every high school – though not all of them will seek gender reassignment surgery.

Lauren is typical in that she has been the target of severe bullying. According to research by Gires and the transgender pressure group Press For Change, more transgender pupils report being bullied than gay pupils, who themselves report rates of name-calling of 82 per cent. Most fail to complete their school education, although they catch up later and gain more than the national average number of qualifications.

More seriously, around half of all transgender teenagers will make a suicide attempt before they turn 20. In February, 10-year-old Cameron McWilliams was found hanged in Doncaster. The inquest revealed he had expressed a desire to be a girl.

In this highly volatile atmosphere, schools must somehow act in the best interests of their most vulnerable pupils. As Bernard Reed, trustee of Gires, says: "Schools think it is so rare that they don't take it seriously, but when a trans child comes into a school, the effect can be seismic."

The Home Office acknowledges the problem of transphobic bullying and has commissioned Gires to produce information for schools explaining gender variance, its medical, legal and equality aspects, which will be displayed in the Crime Reduction section of the Home Office website.

Press for Change has just produced a "toolkit" for further education and sixth form colleges, consisting of 21 five-minute lessons aimed at leaders of education institutions. It was commissioned by the Learning and Education Council, the trade union Unison and the Centre for Excellence in Leadership.

As the deputy head at Lauren's former school says: "We had nothing to help us, but when Lauren had been at school for a while we began getting calls from teachers at other school asking for advice with similar situations."

Not all transgender pupils' school experiences are negative, however. When Pippa James explained at a parents' evening that the reason her 15-year-old son Tim's grades had plummeted was because of his despair following his recent declaration that he wanted to be a girl, the school pulled around to protect the bright teenager.

Although Pippa and her husband offered to remove Tim, the year head backed his desire to "transition" to become "Becky" over a school holiday, declaring that they knew him and could "ensure his safety".

Shortly after, Tim tried to hang himself. Following a number of meetings between his parents and the school, Tim was told to stay home for a day while groups of pupils in his year in the mixed comprehensive were told by well-briefed teachers what was happening to Tim, what to expect and that bullying would not be tolerated.

Curious pupils asked questions, but accepted it and simply viewed him as the fastest runner in their year. According to the family and the school, not a single case of bullying against Tim was reported – even when he came back with long hair and female clothes.

Becky, now 19 and a talented artist, has undergone gender reassignment surgery in Thailand paid for by her parents, and is intending to go to art school.

As Pippa says: "In terms of school, it was a wonderfully positive experience. Becky's life, apart from school at the time, was terrible and she was in utter despair. If school had not dealt with her kindly and been accepting, it would have been the last straw and she would have ended it all."

The despair to which Pippa alludes is because of the battles that Becky, Lauren and all young trans teenagers in the UK face in obtaining medical help for the outward signs of puberty, until they make a decision about gender reassignment.

England has only one clinic – at London's Tavistock and Portman Trust – which offers advice on gender dysphoria to young people. In Britain, the reversible use of drugs is banned before the age of 16 – although other EU countries and the US permit their use.

Jan Quick and the James family have re-mortgaged their homes to pay for their children's treatment. Lauren goes twice a year to Boston, in the United States, for puberty blockers, having been turned down by the Tavistock.

Pushing for reform of UK medical protocols is a major focus for Press For Change, but the organisation is also disturbed by the lack of protection for trans pupils in school. Goods and services regulations just introduced by the Government's Equalities Office do not address transphobic harassment in schools as they specifically exclude education.

"Individual schools now could choose not to educate a child, not to allow them to sing in a choir or to go on a school trip," says Professor Stephen Whittle, an equalities lawyer and a professor at Manchester Metropolitan University, who started out female. "The only protection for kids will be under education law – protecting the right to education as such, but not the nature of it."

Many campaigners for transgender equality are pinning their hopes on the Single Equality Bill, which is expected next year. The Government has been consulting on it and will report in the summer. One of the questions is whether the Bill should extend to schools.

The Equality and Human Rights Commission is calling for explicit protection for transgender children in an equality Act, and extension of the public sector duty to promote equality for transgender people.

"All children have the right to be educated in a fair and tolerant environment, free from bullying." said a commission spokesperson. "At the moment, a very vulnerable group of young people are not adequately protected by the law."

The names of transgender young people and their families have been changed to protect them

Transgender in history – and today

* Elagabalus, who reigned as Roman Emperor of the Severan dynasty from 218-222, offered vast sums of money to any physician who could provide him with female genitalia.

* Jennie Hodgers was born in County Louth, in Ireland, around 1843, but enlisted as a private in the Illinois Infantry Regiment under the name of Albert Cashier. She was accepted as a male and fought 40 battles on the Unionist side under Ulysses Grant.

* Gires has prepared a booklet for the Department of Health, "Gender variance in children and young people: Answering families' questions", which is available in printed form as well as online ( www.gires.org.uk).

* Parents, teachers and teenagers affected by transgender issues can find more information on the Mermaids website at www.mermaids.freeuk.com