The crossing-guard, who stands outside Grindon Hall Christian School in Sunderland, has become well-known for her friendly gestures that she uses to greet the pupils.
Chris Gray, principal at the school, told the Sunderland Echo: "We, as a school, love having our lollipop lady. She's been very popular since she started at the school.
"I'm sure the council have good reason for doing this, but it does seem a pity and excessive."
However, Sunderland City Council denied that it had taken such an action.
Local councillor James Blackburn said: "We are speaking to both the school and our school crossing patrol officer to see where this misunderstanding has occurred.
"There was no instruction from the City Council to stop high-fiving the children as they stood on the pavement as they waited to cross the road, as has been suggested."
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