Hello. I need some advice from those who have been there - done that or not done that.

Here is my situation.
My daughter is 6 years old and is in the first grade. She has a summer birthday and so she is a very young first grader. She made our cut off by 2 weeks when she started kindergarten. The school is now talking about holding her back from moving on to the 2nd grade because her reading skills are not at the appropriate level. They think it is strictly an age thing. They do not think she has a learning disability. They think she is academically immature. They are putting a "team" together that is going to sit down with us and have a talk about what should happen next.
However, she is excelling at everything else. We do not want her to be held back and have expressed that to her teacher. We do know that whatever decision is made - it will be ours in the end.
She reads to us every night and then we read to her. We have hired a tutor for her this summer. She is currently in a special reading class at school - but we are pulling her out because she has not improved and some of the things they teach are actually hindering her performance in other areas.

I believe it will do more harm than good to hold her back - socially and mentally.

I guess my question is - have you held your kid back? Are you happy you did? Were you faced with the option and chose not to? Are you happy with that decision?
I am sure our minds are made up - but I would like some feed back from those who have been in our shoes.