No, the distinctive point about Salcombe pre-school in Southgate, in the north London borough of Enfield, is that it exists because of institutional investment. Insurance companies, pension funds and banks have ploughed money into Asquith Court, the organisation that runs this and 10 other nurseries plus six prep and senior schools mainly in the South-east.

One of the precepts of Asquith Court is the “passionate belief in the right of the individual to choose education”, according to Peter Aughterson, its managing director, who sometimes sports a tie studded with tiny brown teddies. And he is clearly happy that there seem to be an awful lot of people choosing Asquith Court for their children’s pre-school experience. It is the country’s biggest private provider of nursery education and is growing at the rate of 50 per cent per year. Given its funding, it has to. Its investors aren’t in this because of their love of little children. The shareholders want returns, and returns they shall have - eventually. The company has yet to make a profit in its six years of operation.

“All the extra money that has been made is being invested in the business, ” says Aughterson. Among those involved in setting up the organisation was David Soskin, now at the No 10 Policy Unit, who wrote a pamphlet published by the right-wing Adam Smith Institute, advocating a national nursery voucher scheme and a privatised system.

He was one of the founders who thought of bringing institutional money into the independent education sector. But while still a non-executive member of Asquith Court, he hasn’t been actively involved since 1991.

Despite the Conservative associations (although the Portillo connection is more to do with constituency than ideology), the multi-racial pre-schoolers at Salcombe wear unmistakably red T-shirts. The logo is of an intelligent-looking bunny building bricks which says: “I’m Learning at Salcombe Pre-School for 3-5s.”

Several of the pre-schools, including Salcombe, are attached to prep schools. Jean Cross, Asquith Court’s development director, says: “We offer child care and education. Care and education for under-fives are very closely linked, but we believe they need a structure and a focus in the curriculum.” To this end, all of the four and five-year-olds are taught by qualified teachers, trained either for infant teaching or in early years.

“We lead children into the national curriculum,” says Jean Cross, formerly head of a private primary. “We believe that they are willing and able to read a little, write a little and do some number work and that they should be given these opportunities, while avoiding a pressurised environment.”

Every day, the children pair off as “reading buddies” and read to each other. When they go home, they take books along. Which reading scheme depends on what is being done at local primary schools, to which around 40 per cent of Salcombe children will go - the rest stay on for the prep.

Children are introduced to pre-reading skills when they enter the pre-school at two-and-a-half. They are taught phonics through games, play, song and rhyme. Says headteacher Glynis Dinner: “By the time they reach three-and-a-half, there is a lot of knowledge that can be channelled into something more academic. Some children can recognise shapes of words, some need picture references, some can build up words phonetically and some struggle, so we don’t push it. But all children who are with us from three-and-a-half are reading by the time they enter reception class.

Local reception teachers visit the pre-school to see what is going on and Salcombe staff make return visits. Good relations with the local authority are not, however, universal. Aughterson says: “Most local authorities are extremely helpful. But you can get Tory councils that are extremely difficult. It’s not a party political thing. Generally, though, people are coming around to seeing that whatever the private sector can contribute that the public sector can’t is a good thing.”

One example he cites is the Asquith Court pre-school in Walton upon Thames, which is on the same land as an LEA school. “Where the local authority doesn’t have the funds to set up a pre- school itself, it can forge partnerships with the private sector.”

It sounds great. Quality pre-school for everyone, where and when it’s needed, from 8am to 6pm, 50 weeks a year. But of course, there’s a catch to the tune of Pounds 1,000 a term or Pounds 3,000 an academic year for the top class at Salcombe. If children attend for the full 50 weeks, it is proportionately higher.

While those figures are high, the cost of child care elsewhere doesn’t come all that much cheaper. According to the latest figures compiled by Vanessa Schepers of Working for Child care, employer-sponsored nurseries can range in price from Pounds 12 to Pounds 189 per week and private day nurseries, which provide care only, run from Pounds 70 to Pounds 150 weekly. Salcombe fees average Pounds 2 per hour, which compares favourably with childminders and, say Asquith Court management, offers much more.

Peter Aughterson and Jean Cross see the future of nursery education being a mix of private and state provision, possibly under a voucher scheme. “The concept of the scheme is that there should be no more two-tier system between those who can and can’t pay fees. The issue is whether the state is in a better position to manage these funds or the private sector. However the scheme is implemented, it will require a lot of new nurseries.”