Before I make any big decisions, I'd like to present the Principal with research data showing that ability grouping, done correctly, helps ALL students.
I think that the problem that you are going to run into here is that ability grouping has not been shown to benefit ALL students. It benefits high ability students, but taking the high ability students out of the classroom hasn't been shown to benefit the lower performers. That said, it still isn't fair to damage your child for the benefit of others. I believe that Karen Roger's book, Reforming Gifted Education, has some references regarding the studies on ability grouping and how it impacts children of different ability levels.
A few links I could find online that indicate that grouping may benefit high ability and possibly average ability kids and be detrimental or at least of no specific benefit to low ability kids were:
http://jea.sagepub.com/content/15/1/58.shorthttp://www.tcrecord.org/Content.asp?contentid=15684The only article/analysis of grouping that I could find that might benefit your case with the school was this one from 1991:
http://www.ascd.org/ASCD/pdf/journals/ed_lead/el_199103_allan.pdf
