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A Year 4 lesson on the Stolen Generation has been labelled "psychological abuse".

A group of students in a New South Wales primary school were told by their teacher that their parents weren’t looking after them well enough and they would be removed from their care.

The role-play exercise has been slammed by an expert as “psychological abuse”.

At 9.30am a nun presented a letter to her Year 4 class said to be from the Prime Minister.

It wasn’t until almost 3pm that the students at St Justin’s Catholic Primary School in Oran Park were told it was role play.

The children were asked to write down how the experience – a lesson on the Stolen Generations – had made them feel.

A reconciliation 'sea of hands' in 2000. Image via Getty.

Children left crying.

Natalie Wykes's son, Kynan, 10, told his mother he was thinking of ways to escape.

The mother told The Sydney Morning Herald the exercise was "emotional abuse".

"He came home and he said, 'Mum, I got really scared at school today'. This should never happen to another child," she added.

Another parent, Mary Jane Turner, said she would be considering removing her son, Tyrone, from the school because of the incident.

The nine-year-old is the same class and suffers from anxiety, according to education journalist Pallavi Singhal.

"Tyrone came home very distressed and he was crying," Mrs Turner told the Sydney Morning Herald.

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"We just had to keep telling him, 'You're home now, we wouldn't let something like that happen'."

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"It's psychological abuse."

Leading child psychologist Dr Michael Carr-Gregg says about one in seven primary school kids have an existing psychological problem and for them, this could be "an incredibly serious event".

"If you've got an anxiety disorder and you're put through this for the whole day there's no other word for it, I'd call it psychological abuse," Dr Carr-Gregg told Mamamia.

"If you've got an existing condition. If you were the parent of a child that's got an anxiety disorder and this stunt was pulled I don't think you'd very happy at all. It could potentially undo weeks and weeks of therapy."

The psychologist says the exercise could have serious short, medium and long term impacts on children in the class.

"For some kids - who don't have such a robust disposition and might not be that resilient - you could have quite serious long term impacts, like the fear of abandonment," said Dr Carr-Gregg.

"You could create separation anxiety disorder, where the children don't want to be away from their parents. You could have quite significant school refusal. There are a whole range of outcomes depending on the psychological condition of the children," he added.

"We take full responsibility."

The school says although the exercise was conducted without incident previously, it will not happen again.

Tim Gilmour from the Catholic diocese of Wollongong, which oversees St Justin's, said the purpose of the lesson was to give students a deeper understanding and build a degree of empathy towards a part of our nation's history.

"The intention of the exercise and the execution of the exercise haven't matched up," Mr Gilmour told Mamamia.

"Our intention is not to distress and upsets students that's not what we do.

"That being the outcome, we've taken it very seriously and we've responded in terms of attending to those kids to ensure that they are reassured, to try and give them an understanding of why the activity was done," he added.

The school says the area of study is still very valid and appropriate but they have "taken stock" of their methodology.

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"Teaching is a process of ongoing continuous improvement...This certainly won't happen again in that format," said Mr Gilmour.

The Australian Aboriginal Flag. Image via Getty.

It comes as The Healing Foundation are set to roll out education kits for schools in an effort to help schools with Stolen Generations history.

"The key goal is to get that history taught, get that knowledge out there about what happened for Stolen Generations and what that has meant for them," CEO of The Healing Foundation Richard Weston said.

The inclusion of compulsory modules on the Stolen Generations in school curriculum was a recommendation in the Bringing Them Home report 20 years ago.

"We think it's important that all Australians know this story and we think the best way to do that is to start educating our kids about it, " says Mr Weston.

The CEO says the school kits were developed by an indigenous curriculum writer and in consultation with Stolen Generation members across the country.

"It's a tricky area to teach...there's a lot of sensitivities...It demonstrates how tricky an area it is, so it has to be approached carefully," said Mr Watson.

"But it's still important that the Stolen Generations history is taught with the right resources."

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