Primary school pupils and toddlers in nurseries are being punished for making racist insults, according to a new report, even if they don't understand the terms they use. Teachers are being treated like counter staff in police stations as they have to fill in forms detailing name-calling and jokes. Meanwhile diversity "missionaries" are said to be increasing the divide between white and black children by forcing them to see everything through the prism of race.

Adrian Hart, the author of the report The Myth of Racist Kids published by the Manifesto Club, a civil liberties group, said: "The obligation on schools to report these incidents wastes teachers' time, interferes in children's space in the playground, and undermines teachers' ability to deal with problems in their classrooms.

The report calculates that some 280,000 such incidents have been reported in England since full records began. An earlier investigation using Freedom of Information requests by Channel 4 News found 95,022 incidents between 2002-03 and 2005-06.

Schools that send in "nil" returns are criticised for "under-reporting", and are sent letters telling them to put up posters raising awareness. Any school that fails to investigate alleged racist incidents risks being seen as "condoning racism", according to the official TeacherNet website.

In many cases, the "perpetrator" is punished by the head teacher and their parents will be told.

Sometimes the police are also called in, with the Crown Prosecution Service prosecuting 2,916 children aged between 10 and 17 for race or religious hate crimes in 2007-08, up from 404 just two years earlier.

Mr Hart recommends that the compulsory reporting of alleged racism is scrapped, and that schools are allowed to develop their own policies of discussing diversity and dealing with playground disputes.