A High Court judge has given the green light for a full trial into Oxfordshire County Council's transgender school guidance.
The council's Trans Inclusion Toolkit said that children should be able to use toilets, changing rooms and school trip accommodation according to the gender they identify with.
"A child or young person being trans or questioning their gender identity does not constitute a safeguarding concern or something where the child's parents or carers have to be informed," the toolkit says.
The legal challenge was brought by the parent of a 13-year-old girl and a teacher, and is being supported by the Safe Schools Alliance UK (SSA).
The case will proceed to a full trial later this year after the High Court judge determined that the toolkit could be unlawful.
SSA welcomed the judge's decision to allow the case to go to trial.
"This case is of crucial national importance. If the court decides in favour of the 13 year old girl who is taking legal action, other toolkits and resources that have similar elements, and are supported by Allsorts, Stonewall, and others are likely to also be unlawful," it said.
"We would like to thank the teenager for taking this step to protect the safety, dignity and privacy of all girls."