Lee-Anne Gerry, 27, was 10 days overdue with her first child when she was told baby Ellie had died in her womb.
She had to give birth to her 6lb 12oz stillborn baby who died after the umbilical cord got wrapped around her neck.
Accountancy student Ms Gerry cradled Ellie in her arms for four hours before nurses took her away.
She arranged for a private funeral service at Craigton Crematorium in Glasgow, run by the Co-operative, for her daughter but she claimed she was told by staff there would be no ashes.
Ms Gerry said she was later told there had been ashes and that staff had thrown them on the grass in their gardens of remembrance after the funeral without her knowledge. She said she had been robbed of the chance to grieve for her daughter and has now joined hundreds of other mothers to take legal action against crematoriums.
Ms Gerry, from Govan, said: "I asked about getting a special small urn made for her ashes but was told there wouldn't be anything left. I was gutted and upset but accepted their word."
She has since received an e-mail from Craigton telling her "the ashes were dispersed in the garden of remembrance as per the instructions of the applicant".
Ms Gerry, who is being represented by Thompsons Solicitors, insisted she had no idea she was signing a form to let a stranger throw away her daughter's ashes.
She said: "That's not what I would have wanted for my daughter."
The crematorium said it was carrying out the wishes of the family.
The Co-operative Funeralcare said: "We would like to reassure the family that the funeral was carried out in accordance with the wishes of the family member who arranged the funeral.
"However, as legal proceedings are ongoing, it would be inappropriate to comment further."