I told her pretty much everything that was said in the other post about how he's only been there 4 days, he's still too young to be doing interactive play, I feel like I have the right to have an input of where he goes, etc. And she fully agrees with me. She said that he probably is intimidated and that's why she suggested switching him to the nursery and I informed her that that means he's going to get use to being the big guy and then he's just going to have to get adjusted all over again and it wasn't fair to him.
She said she didn't think of it that way. I told her I would work with him over the weekend (which he walks fine at home I really think it's just because it's all new stuff) and she said that on Monday if she was still worried then she would let us know and he could start going to the nursery for just an hour or two in the mornings when there aren't many babies so he will have quality time with someone at DC. I agreed to this IF there is NO change on Monday.

Re: So I spoke to DS's teacher and...
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Kids at this age engage in "parallel" play at best. They don't generally play together. That's too much to expect so I'm not sure what the DC teacher's problem is? I'm sorry this has been stressful.
My LO goes to an in-home DC and she is the youngest of five kids there. The others were walking while she was still learning to crawl and it still worked fine. She caught up and she LOVES the bigger kids now.
Stick to your guns! You know what's best for your child!
BFP #2 5/27/12. EDD 2/1/13. m/c and D&C 6/21/12.