A pressure group called Norfolk Nursery Link was formed in response to alarm at the way the scheme is operating in the county.
In a statement the group says that while it generally welcomes the voucher scheme, reception-year children should only receive age-weighted funding.
The statement adds: "This would eliminate direct competition between providers and school reception classes that were previously serviced by the pre-school sector."
Group members are concerned that the nursery voucher scheme has prompted the majority of Norfolk first, infant and primary schools to admit four-year-olds at the beginning of the autumn term. The earlier schools take the children, the more voucher money they receive.
Group spokeswoman Diane Le Grice, teacher-proprietor of The White House Nursery School in Great Yarmouth, said: "We are horrified at what is happening. "
The private owners are also asking Mrs Shephard to make the scheme more flexible to allow working parents to spend the voucher at any time of the year and not just school terms.
The group says: "Children do not only learn within the structure of school terms. A more flexible use of the vouchers would enable parents to make a choice from whatever validated early- years setting they considered most suitable."