The article, published six months ago, suggested 10-year-old Kathryn Blair had been given preference over local applicants because she was the prime minister's child.

The Mail on Sunday argued their story raised questions about Labour's education policies

Kathryn is due to move in September from a state primary school in Islington, where her parents used to live, to the Sacred Heart school in Hammersmith, a Roman Catholic state secondary school, some six miles from where they live in Downing Street.

The PCC said: "There was no evidence to support the allegation that Kathryn Blair was unfairly admitted or had received special treatment, and the newspaper did not provide any.

"Yet, by repeating unsubstantiated allegations about her, the story was presented in a way which implied she had."

However the ruling added: "It is manifestly the role and responsibility of the press to scrutinise government policies and the conduct of those responsible for them.

Media correspondent Nick Higham: "The Mail on Sunday argues that it was in the interest of the public"

"The press should be entitled to relate such scrutiny to the children of politicians where their conduct in matters relating to their children has an impact on policy or gives rise to reasonable charges of hypocrisy.

"In appropriate cases this might provide the exceptional public interest justification required by the (PCC) Code (to allow publication)".

Right to privacy

The prime minister's official spokesman said the Blairs welcomed the watchdog's ruling.

He added: "They hope it will ensure that their children and the children of other public figures will in future enjoy the same right to complete their schooling in the privacy to which all children are entitled."

The Blairs said that all children of public figures had a right to complete their schooling in privacy

In a statement, the Mail on Sunday said: "The Mail on Sunday published these articles in the deeply-held belief that they raised important issues about Labour's education policies.

"We defended them because we strongly believe that the press should be free to report such matters.

"At every stage great care was taken to ensure that we did not publish any information about the prime minister's daughter that was not already in the public domain.