Margaret Hodge, minister for employment and equal opportunities, announced the emergency measure in response to fears by the Pre-school Learning Alliance that 3,500 pre-school and playgroups could close in the next year.
An NOP survey, commissioned by the alliance, of more than 700 members, found that a quarter had major fears about their sustainability.
Since 1997, 2,000 pre-schools have closed and a further 1,500 only avoided the same fate thanks to last year emergency funding from the Government.
Margaret Lochrie, the alliance's chief executive, said: "The additional money is welcome but it's only about pound;150 per group which is not going to be the solution.
"If closures continue there is a real danger that the pre-school movement will disappear entirely within a very few years.
"This would be a great hardship not just for the hundreds of thousands of children who attend pre-school every day, but for the comunities which they serve."
An independent panel, set up by the Government to study the reasons for closure, found schools were recruiting children earlier, thus reducing pre-school and playgroup intakes.
The PLA claimed parents were being forced to send their children to reception classes for fear of losing Year 1 places.
But a Government survey published this week, based on interviews with 127 parents, found 89 per cent were happy for their child to attend a reception class.
Ms Hodge said: "The survey findings clearly show that parents of summer-born children who chose to send their children to a reception class had enough information and did not feel pressurised into transferring their children and were happy with the decision they made.
"Many parents see reception classes as good preparation for schools by encouraging discipline and developing early literacy and numeracy skills. We want a vibrant sector and we want to offer parents diversity but services must meet the preference of parents."
US pre-schools expand, 12