Four years ago, when Kerr Syme was seven, his father died from neck cancer. Although he had been ill for a long time, the death affected Kerr badly. For months, he felt isolated and confused. 'I didn't want to speak to anyone,' he said. 'My whole personality changed. I became a soft person and I used to get quite emotional.'

Whenever Kerr, now 11, heard the film music from Titanic, it made him cry. 'It reminded me of my dad. Me and my dad were very interested in the Titanic. But some boys at school started bullying me. They would make me cry and laugh at me for crying. Then I started to have temper tantrums. It was horrible.'

For two years Kerr kept things to himself. But last year, when he was in year six at Longstone primary school in Edinburgh, he turned to The Place2Be, a nationwide charity providing confidential, emotional and therapeutic support to up to 37,000 troubled children a year.

'I started talking about things and I got a lot of confidence back, and the bullying just stopped,' he said. 'I'm actually friends with one of the boys now. I still have the occasional cry when I think about my dad, but I'm much happier.'

Children in 112 primary schools can receive up to 24 therapy sessions, each 50 minutes long, either one-to-one or in a group. They are encouraged to express their feelings in whatever way is most comfortable, whether through play, art or talking. Parents are also supported by being offered a year of free one-to-one counselling.

The Place2Be has been chosen as one of the charities supported by The Observer's Christmas Appeal, which focuses this year on the importance of supporting children with mental health problems or who have mental health problems in their family. Every pound raised by our readers in the coming weeks will be matched by a pound from the Zurich Community Trust, up to a total of £100,000. Others to benefit will be the mental health charity Rethink and the Family Welfare Association.

Although The Place2Be hopes to expand and has received widespread praise for its work, as well as generous philanthropic donations, its very survival is at risk in certain areas because of a lack of funding.

Deb'bora John-Wilson, a psychotherapist originally from the Bronx, who has worked with the organisation for eight years, is in no doubt that the kind of early intervention in children's lives can prevent far more serious problems, such as alcohol or drug abuse, crime and other antisocial behaviour in later life.

'When we address these problems early, it gives young people much more hope for the future of finding wellbeing and happiness,' she said. 'It enables them to understand better their emotions and communicate how they are feeling in a much more healthy way.'

John-Wilson, who is now developing the parents' service, said that, if something such as The Place2Be had been available when the adults were at school, the chances are they would not be needing help now.

'There are so many things - dealing with a bereavement, loss, abuse - that might have happened in a person's childhood, but which a person is only coming to terms with now.'

Traditional approaches to school-based counselling services tend to be remote and peripatetic, but The Place2Be operates in the school. Children are not required, for instance, to go off to see a counsellor at another site or in a hospital. This reduces the stigma, said John-Wilson. Each primary school has a room, a project manager and several paid clinicians and volunteer counsellors. Most of the volunteer counsellors are trainee therapists.

Children can refer themselves for help or be sent by a parent or teacher. Helen Forrester, the project manger at Murrayburn primary in Edinburgh said children's concerns ranged from falling out with a friend and worries about school work to bereavement and abuse.

Pupils have appealed for advice on a series of problems which include bullying and lack of friends. 'I think I can't fit in life,' wrote one. Others complained about 'Mum and Dad', 'fighting', that 'people hit me' or about difficulty with 'my hamster'.

Irene Mirtle, Longstone's head teacher, said the counselling 'is an invaluable feature of our school and should be available in every primary. We have noticed a real difference in some of our pupils. One of the things that really impresses me is that lots of boys use it. There is no stigma. They are quite happy to go there to talk about whatever is on their mind.'