The findings may worry ministers as they prepare to launch the pilot nursery voucher scheme in four English education authorities in April.
The survey, by HM inspectors in Wales, found the standard of accommodation unsatisfactory in three-quarters of playgroups visited, to the extent that the quality of service was "adversely affected". The inspectors also found that little was done in playgroups to encourage reading and writing , with literacy standards unsatisfactory in four-fifths. Playgroup leaders need more and better training to develop their teaching skills, they say.
Meanwhile, accommodation is unsuitable for very young children in 40 per cent of infant classes, and the situation is worse in mixed-age classes than in reception. The resources for three and four-year-olds are inadequate in 70 per cent of reception and infant classes, and usually reflect weaknesses in heads' and teachers' knowledge of what is appropriate for very young children, says the report.
It is the first time HMIs have reported on voluntary playgroups, which are not part of their remit, as well as state schools. The report has been awaited eagerly in the early-years world because it is thought to be the only Government survey of its kind, and is aimed at informing ministers as they make plans to inspect institutions hoping to take nursery vouchers.
The findings support the claims long made by the nursery lobby that state nursery schools and classes do better than infant classes and playgroups in terms of teaching, accommodation and curriculum planning, They are also in line with other studies, such as Sir Christopher Ball's Start Right report, which called for universal nursery education.
The inspectors say accommodation is satisfactory in nearly all nursery schools and 80 per cent of nursery classes, while materials and equipment are adequate and well-used in 90 per cent. The good adult-child ratio ensures ample individual attention.
The report says playgroups provided a secure, happy atmosphere, where the children are well cared for. But, although 90 per cent of staff had had some training, and were aware of the desirability of fostering learning as well as providing care, "the work is insufficiently planned with specific educational goals in mind".
Although reading materials were available, and children looked at books, the report says: "The majority of four-year-olds show little development in understanding that print is used to carry meaning."
While playgroups fostered number skills, standards in other aspects of maths were unsatisfactory.
Inspectors visited 120 local authority nursery and primary schools and 22 playgroups, selected to represent a full range of social, economic and linguistic settings. Five playgroups were in purpose-built accommodation; the rest used premises such as community and church halls, and had to put away their equipment at the end of each session. "This makes it difficult for them to create stimulating activity areas."
Pat Davies, head of the early childhood unit of Children in Wales, says: "The findings of this report suggest that funding for the voucher scheme is misplaced unless there is an allocation for training and professional development."
She pointed to the low level of public funding for playgroups.
Hywel Jones, director of the Welsh-medium playgroup movement MYM, said: "There's nothing in the report that can't be put right with adequate funding.