"There will be no more destructive competition", said Mr Blunkett. "It will be replaced by close consultation and co-operation between parents, providers, local education authorities and the private and voluntary sectors."
From April 1998, all LEAs will be expected to have Early Years Development Plans in place, drawn up by representative Early Years Forums. The Government intends to consult on the scope of the plans and how the forums will work.
All funds previously earmarked for the voucher scheme - some pound;674 million this year - will be available for the new system.
Local education authorities will be invited to submit plans showing how they will provide places in co-operation with the private and voluntary sector.