In this study of primary school children, a novel "symbol-string" task is used to assess sensitivity to the position of briefly presented non-alphabetic but letter-like symbols. The results demonstrate that sensitivity in the symbol-string task explains a unique proportion of the variability in children's contextual reading accuracy. Moreover, developmental dyslexic readers show reduced sensitivity in this task, compared to chronological age controls. The results suggest that limitations set by visuo-spatial processes and/or attentional iconic memory resources may constrain children's reading accuracy.