What an awful situation to be in, you must feel torn apart and so very let down.
The authority do have funding for specialist education its just that you have to prove the "need". In a way you can only really prove this by evidencing that every avenue has been explored, like PWP say, with your son trying out the new arrangement. However been in a very simular situation as yourself, I can totally understanding how difficult this can be and how damaging it could to the child. I feel quite strongly that we should not have to use our child as a "guinea pig" putting them into extremely difficult situations where we know they will fail, not cope or meltdown just to prove what we as parents already know. I would have dearly loved my son to attend regular mainstream school, but knew in my heart and my head it was not going to work, he was a square peg in a round hole and would continue to suffer and probably end up drowning in an environment that appeared totally alien to him.
I assure you it can be done, we found the "right" school for him and yes it is expensive, but I don't care about the cost and to be honest don't know or even want to know how much it costs, why should I be made to feel guilty, I care about my son's education which he has a legal right too. The education authority I found don't bode well to cristisim and can only suggest yu play them at their own game, be willing to try short term but bcak up with lots of evidence.......sorry waffle on a bit there, sorry but this is a subject I am very passionate about.
Stay strong and remember no one knows you child better than you and don't let anyone else tell you otherwise.
Clare x x x