Several parents have written to the council to complain - and one mum has started an online petition to protest at the decision.
Laurieston Primary had invited parents to come along to the school playground where they planned to hold a socially distanced event for the 31 pupils moving on to high school.
But a message sent to parents' this week put paid to all the plans when parents were told they would not be allowed to attend.
The change of heart follows a joint agreement with Falkirk Stirling and Clackmannanshire councils, on the advice of Forth Valley NHS.
But mum-of-three Kirsty Sharpe says the decision is ridiculous and is challenging the council to explain its logic.
She said: "Falkirk is moving into level one - Stirling and Clackmannanshire are still in level two, so why should we have the same arrangements?
"There is no logic to this decision and no common sense!
"We could attend a wedding with 100 people, we could go to a pub - but we can't stand outside and take part in a milestone in our children's lives."
Kirsty says the P7 children have missed out on lots this year - including the annual residential trip - and this is an important event for children and their parents.
She said: "At Laurieston Primary, we make a big deal of the leavers' assembly.
"The parents buy a balloon arch and we have a red carpet - it's a really special event.
"We totally understand that we can't have an indoor event and that safety has to come first - but we don't see why we can't have an outdoor event that is properly organised."
The decision has also been a huge disappointment to mum Amanda Potter, whose son Lewis will leave Carrongrange High School next Friday.
The additional support needs school in Grangemouth had planned to involve parents in a special leavers' assembly which, they were assured, would take place whatever the weather.
Amanda says not only are parents and children disappointed at the decision, many teachers who have formed a close bond with the pupils are also upset.
She said: "It's such a special moment - my son walked into that school a boy and he'll be leaving a man.
"I know I'll be be crying my eyes out but I was really looking forward to it - yesterday we got an email saying they weren't allowing it to go ahead.
"I don't understand why as of Saturday we can go out and have a drink and even hug people but we can't attend an outdoor event, where everyone is sticking to their own family groups."
A Falkirk Council spokesperson said: “This approach has been agreed by the three local authorities across Forth Valley in conjunction with Public Health officials.
“Unfortunately this does mean we are unable to welcome parents to any end of term event.
“We know this will be disappointing for many parents but we don’t take this decision lightly and we hope that everyone understands that safety has to come first.”
The petition calling for a re-think is here https://www.change.org/p/falkirk-council-allow-p7-and-s6-leavers-assembley?utm_content=cl_sharecopy_29211614_en-GB%3A6&recruiter=875281848&utm_source=share_petition&utm_medium=copylink&utm_campaign=tap_basic_share&utm_term=G%3ESearch%3ESAP%3EUK%3ENonBrand%3EAll-Match-Types