That's a very sensible post from Roisin, and I thnk she's absolutely right.
NAB, I know how frustrating it is when a teacher doesn't seem to know how well your DD can read. I've been in exactly the same place myself - twice! Both my DDs could read fluently before school and were used to reading whatever they chose to read. So when DD1 came home with a two words per page reading book from Reception I thought it was a mistake, went in, explained that she was a fluent reader, was met with a little hostility but mostly disinterest. In my innocence I thought I was actually helping the teacher, I'm shaking my head and laughing at myself now! A slightly harder reading book was then provided - which missed the point entirely.
I, like you, got very upset and frustrated about the situation and tried again with the teacher but was met with a blank wall, really. I even requested a meeting with the Junior Head along with the teacher, and was met with a brick-wall 'teachers know their job' attitude. They saw me as a pushy parent by now, I'm quite sure
This did no harm whatever to DD1 who continued to read anything and everything for pleasure. I had thought the teacher's attitude of 'they'll all catch up in the end, just wait' would somehow impeded my DD's development and that 'not being stretched' would be disastrous for a child so clearly not being, at that point, but in fact I've realised the teacher was right - not for the reasons she intended perhaps, but in that while the others did catch up in reading, my DD retained her natural quickness of learning ability, and had the benefit of many years of home reading working its own natural magic on her vocabulary, writing style, imagination, et cetera.
When DD2 came along some years later, same story except that this time I sat on my hands, had a complete laissez-faire attitude and didn't care what reading book she came home with, even though yet again not much attempt was made to accommodate her ability. I just laughed it off when she brought home Biff and Kipper and then picked up C S Lewis to read in bed. And again, it did her no harm at all. She certainly wasn't 'stretched' in the academic sense much at primary school, and to a certain extent not even through GCSE years, but she's at Oxford now and I don't hear much about not being stretched now!
Honestly, beyond doing what you have done and making your DD's ability known to the teacher, you will save yourself a lot of frustration and worry if you remember that your DD is undoubtedly developing fast and benefiting from her brilliant reading at home, and that this will show through in later years.