BULLYING AMONG CHILDREN - How shall we train our kids to cope with bullying?

This topic has been in my mind for quite some time. We read in the daily newspapers about bullying in schools and how horrific it can get. It recently popped up again after my son spoke about what he wished to do to the person who bullied him. Here’s what happened:

My son attended a nursery when he was 2 years old. Observing that it was nice with a relatively pleasing play area, fish pond and lots and lots of toys and sound educational books and materials, I decided to send my son to this nursery. Moreover, it was being managed by a person whom I thought had the right qualities. For one, she’s a graduate in early childhood development and I was so so pleased to know this fact because I thought “okay, this lady sure understand kids very well and I bet there’ll be lots of fun stuff to do and my kid will be in good hands.” She also seems to have a nice personality and looks friendly with the kids (at least that’s what she portrayed in front of us, the parents). My son was doing fine in the beginning but later on, he was disturbed with the idea of having to go to the nursery. He was overcome with anxiety. Imagine a 2 year old waking up at 6 in the morning crying, asking whether he has to go to the nursery on that day, and this happened every day. I felt sad to see my baby crying and worried every day but at first I thought it was just separation anxiety so I kept sending him there. Whenever we arrived at the nursery, he would cry and this got worse as he started wailing and one day he just screamed and ran to our car. “That’s it!” I said. Something must be so wrong with this place. I tried asking my son but he won’t tell anything. He kept everything to himself until he is 4 now, as he is slowly sharing with us what happened. He was practically bullied by the son of the lady who runs the nursery. He was beaten and picked on. Nothing was done about this at that time. The lady never reprimanded her child for bullying small kids.

Now my son says that he wants to do the same thing to the boy as a way of revenge. I told him that it is not the right thing to do. Hitting the person who hit you doesn’t solve the problem. It just makes you like them. The question I asked myself is how do we teach our kids to cope with such situations? How can we tell them to walk away. Can we teach our kids diplomacy?