Since last year 800 pre-schools have shut and a further 1,600 closures are predicted. The losses are blamed on the increasing recruitment of four-year-olds by primary schools, keen to have the cash the children bring with them.
At the Pre-School Learning Alliance annual conference in Bournemouth this week the single largest provider of community-based pre-school education in England launched its rescue bid.
Entitled "Pre-School Matters", it is due to run for one year from next February, and will highlight the achievements of some 19,000 pre-school playgroups.
Margaret Lochrie, the PLA's chief executive said: "We have faced closures and loss of jobs on a scale previously unimaginable until the nursery vouchers scheme. However, the worst may be yet to come."
Under the previous government's nursery voucher scheme, schools recruited four-year-olds into their own nurseries en masse for the first time. Playgroups accused schools of aggressive recruitment tactics and of putting money before the needs of children. In turn, teaching unions accused the PLA of "sour grapes".
Labour abolished vouchers in July this year, although "the indelible damage they caused cannot be reversed", said Ms Lochrie. According to a PLA survey, half of its pre-school playgroups lost four-year-olds between 1995 and 1997. And just under 12 per cent believe they are likely to close in 1998.
Ms Lochrie said: "If this research is a reliable reflection of what is happening, pre-schools will have lost nearly 41,000 four-year-olds in the space of one year. That represents the loss of a third of all four-years-olds in pre-schools in 1996 as well as a loss of Pounds 45 million in revenue to community pre-schools. That money is now going straight into primary school pockets. And we can expect nearly 1,600 further closures in the next year. "
Ms Lochrie said that more than 98 per cent of pre-schools tested so far have passed an Office for Standards in Education inspection, proving their educational validity.
The PLA insists it has no argument with schools which take four-year-olds in proper nurseries with a low staff:pupil ratio of 13:1, but claims many schools are putting four-year-olds into large reception classes with ratios averaging 30:1.
The Alison Cutter, chair of the PLA's Hereford and Worcester branch, said: "Having lost most of our four-year-olds to local schools, our groups are closing down at an alarming rate. That makes a mockery of parental choice because there will now be no provision for three-year-olds who make up 60 per cent of our intake or for those parents who prefer pre-schools.
"At least two of the four-year-olds previously in our care have been suspended from class for bad behaviour, when with us they were fully integrated.
"It's not the teacher's fault but they do not have the time or the right attitude to deal effectively with four-year-olds in large classes. I wish people would realise we are not here to protect our sector, we are here to protect good provision for under-fives."
Ms Lochrie said the opportunities created by pre-schools for children and their families should be "blindingly obvious", but that their achievements had been obscured. She said: "We simply haven't got the message across - the loss of a single pre-school, far less 800, is a tragic waste.
"In 36 years, our low-cost provision run by parents and born out of compassion has helped at least 20 million families. If these children had been in state nursery schools at today's prices this would have cost the taxpayer more than Pounds 50 billion."
Mike Hipkins, the senior civil servant with responsibility for early years at the Department for Education and Employment, assured delegates that under the Government's early years development plans, there would be partnership and full consultation with the voluntary sector. Local authorities have until next year to produce plans for their under-fives.