Early-years campaigners are celebrating after children's minister Dawn Primarolo announced the introduction of a controversial new system of funding was to be put back a year.
The early-years single funding formula was due to begin in April, but there has been a growing clamour to stop the process as some maintained nurseries faced budget cuts of 25 per cent while others had received no information from their local authority - creating chaos and confusion.
Addressing the Commons children, schools and families committee, Ms Primarolo said that local authorities would have a further year to come up with a funding formula for their area - after discovering that only one in three were ready to go ahead in April.
She said: "I am minded to say to local authorities, firstly, we are going to delay implementation to 2011.
"But there are some local authorities that are telling us they are ready to go and we would invite local authorities to apply to join pathfinders."
Ms Primarolo said she believed there was backing for the scheme in principle: "This is really complicated, everybody signed up but it is proving more difficult to implement than anybody appreciated; some have managed it, some haven't. Let's look at a slower speed to get to the same point."
Ms Primarolo said a ministerial statement would be made and letters sent to all local authorities.
Megan Pacey, chief executive of Early Education, an organisation for early-years practitioners, said: "I am delighted. We have the opportunity to take the time to think properly about this and iron out some of the challenges.
"If this had steamed ahead for the sake of an implementation date we would have found ourselves in a very different place."
Under the scheme, each authority will draw up a single formula to make it clear how early-years funding is distributed between different types of provider.
The formula would also build in incentives to improve quality. Currently, funding is distributed under different systems for different types of provider.
But the Government also insisted that nursery funding should be determined by participation rather than places, which meant dramatic changes for maintained nursery schools. Many have a staggered intake, bringing in children as they become eligible for free education in the term after they turn three, but are not able to stagger their leaving dates as these are dependent on school admission arrangements.
The move to a single funding formula was announced in 2007. Ms Primarolo said the delays were partly due to unforeseen complexities and partly due to the recession, which meant authorities were faced with demands to deal with more pressing problems.
There was also concern about juggling the sheer number of changes in early years - there are also planned changes to move from offering 12.5 hours a week to 15 hours a week, extending the offer to two-year-olds and providing more flexible offers, such as longer sessions over fewer days.