Parents of children at South Morningside Primary have been campaigning for years to get money to address the overcrowding problems, which mean many children have to eat lunch in classrooms, miss out on lunchtime play and also fail to meet national targets which say they should do two hours of PE every week.
They have finally been told of the "positive result" that will see the school prioritised for an extension, but this is likely to be several years away as the council's capital budget for projects such as this is fully committed until 2014.
A letter sent out to parents on behalf of city education leader Councillor Marilyne MacLaren said: "You will be pleased to learn that South Morningside Primary School will be included within the capital budget, which means that the school will be prioritised when council funds permit expansion.
"This is a positive result for South Morningside as funds will be set aside to address the accommodation problems, but there is no amount of funds attached and a timescale for this is unclear due to the current financial situation."
But Jerry Forde, chair of the school's parent council, said: "Artificially, if we're on a list, in theory it's better than not being on a list but if the list does not have a practical impact it looks like nothing more than a political gambit.
"Marilyne MacLaren can use it in the context to say that she has given South Morningside this commitment in terms of being on a list when in fact that doesn't mean anything.
"If there is no financial commitment, there are no real options for the future. It's just talk."
A feasibility study into options for the future of the school was carried out in 2007, which focused on the possibilities for a redevelopment on the existing Comiston Road site.
Options including a new build on the Royal Edinburgh Hospital or Astley Ainslie sites and a new build on Morningside Park have also been considered.
Ideally, parents would prefer a brand new school on a new site but accept this would be "asking for the impossible".
Cllr MacLaren believes including South Morningside on a list for future development is better than doing nothing.
She said: "I have been working with the parent council and I have made it very clear that money isn't available at the moment.
"In the meantime, parents would rather be thinking about the various options and thinking about what they would like when that money becomes available.
"It seemed better than closing the stable door and saying we are not discussing it."
Paul Godzik, Labour councillor for the Meadows and Morningside ward, said he understood parents' frustrations with the delays.
He said: "There has been very little progress over the last three years and the only action taken was the feasibility study which was instigated by the previous administration.
"The fact that there is no budget or timescale for this work simply isn't good enough. There seems to be no prospect of this being initiated in the short term.
"No wonder the parents, pupils and teachers feel let down."