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The education secretary has launched a green paper on special educational needs that aims to "challenge a culture of low expectations for children with SEN".
In a written statement to MPs, Michael Gove set out "a new approach to identifying SEN in early years settings and schools and give them effective support to succeed".
He plans to give parents and communities much more influence over local services, remove bureaucracy and establish a clear system that brings together professionals and the voluntary and community sectors.
A new single early years setting-based category and school-based category of SEN will place "sharper accountability" on schools.
Gove proposes a new single assessment process and 'Education, Health and Care Plan' by 2014, to replace the statutory SEN assessment and statement.
The government is also looking at the option of a personal budget by 2014 for all families with children with a statement of SEN.
Disability charity Scope welcomed the "joined-up approach" but expressed some concerns about Gove's plans.
"The green paper has some interesting ideas," said chief executive Richard Hawkes.
"While plans to allocate personal budgets to children with SEN is a move that we have long supported, this needs to go hand-in-hand with ensuring that suitable and affordable services and support are available, and that parents have a genuine choice of school for their child.
"Given that the government's plans to devolve decision-making and funding down from councils to individual schools, we worry about schools' ability to commission services for children with low-incidence, but complex support needs effectively or at a reasonable cost.
"We are also concerned at proposals to abolish statements and other support schemes for children with less complex needs and devolve this responsibility to individual schools, especially in the current financial climate.
"This could lead to many children with lower levels of SEN no longer receiving the early intervention or ongoing support they need."
Teachers' union NASUWTsaid the government believes that there are too many children and young people classified as having SEN and it is trying to redefine it.
"In the context of an austerity programme, this can only mean that fewer children will qualify for additional support," said general secretary Chris Keates.
"The reform of critical support for children and young people with SEN is being proposed at a time when the health service is being plunged into the chaos of reorganisation, the free market is being introduced into schools and massive cuts and job losses are being faced by essential services.
"Decisions are being taken in relation to reform of the funding system that could lead to SEN being sidelined, as the Coalition government has not commissioned any detailed work on the funding of such provision."
Keates claimed that Gove's proposals will "create anxiety and fear" among the parents of SEN children.
A consultation on the plans laid out in the green paper will continue for four months.
"The proposals we set out are for practical testing in local areas," Gove said.
"From September 2011, local pathfinders will help demonstrate the best way to achieve our key reforms.
"We will also be working across government and with our local and national partners to set out detailed plans by the end of the year."
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