Both girls are in the same class and the teacher is aware of the situation. I asked for my daughter to change classes, but the school aren't prepared to do that as both girls share the same friends in both classes.
Since I wrote the first message things have now changed. I have had to withdraw my daughter from school, as she was on the verge of having a nervous breakdown and the little girl has now taken all my daughters friends away. I am in the process of writing to the Governors of the school and I will be getting a complaints form from the school. I'am also having to change my daughters ballet and brownies class so my daughter can start a fresh.As for school, I have no idea whats going to happen.
I was told by doing this, the othergirl thinks she has won!! But I had no choice, I have to put my daughter first.

I was touched by your story, my daughter is in a similar situation - she is seven. I am considering changing her school. Has changing schools helped your daughter? I know this means the bully wins but sometimes you have to run away to be able to fight another day.