Nursery vouchers, said Gillian Shephard, launching her Pounds 185 million initiative last week to give them to the parents of every four-year-old just before the next General Election, “represent an important component in the development of a market which will provide choice and diversity for parents”.

Although she is known to have opposed vouchers as a way to expand nurseries, Mrs Shephard managed to exude enthusiasm. The mechanism of vouchers was the “key to the development, I believe, of excellence. Standards will be driven up. Costs will be driven down. Parents will love to have the feeling of a cash voucher in their hands”.

Critics were not persuaded. Opposition spokesman David Blunkett said it was a “con” because most four-year-olds were already in provision, and a “paper promise” which would do nothing to create new places for those without. There is no money in the programme for building, start-up or training costs for new nurseries or expansion of existing ones in order to fulfil John Major’s “cast-iron commitment” to provide a nursery place for every four-year-old whose parents want it. But the Department for Education and Employment is “confident that the market will respond to parental demand”.

The scheme will cost Pounds 730 million. Some Pounds 165 million of new money will provide vouchers for the estimated 150,000 four-year-olds not in local authority provision. This includes pupils in private schools and playgroups, but the Government could not say what proportion would subsidise those who already had places and which would go to children without. However, the Government calculates that 500,000 of the nation’s 650,000 four-year-olds are in state schools, and is clawing back Pounds 545 million (about two-thirds) of the money LEAs currently spend on pre-school education to recycle as vouchers.

A further Pounds 20 million of new money will be spent on inspection and administration. A private company will be appointed to run the scheme, and Mrs Shephard says administration costs will be low.

The “first phase” - they are not calling it a pilot, as the use of vouchers is “non-negotiable” - will begin in April 1996, in volunteer authorities, and cover about 10 per cent of pupils nationally. LEAs have been invited to apply, but it appears unlikely that Labour authorities will be interested. Parents will get their vouchers in February. The full scheme will begin in April 1997. Parents can use the vouchers for state provision, towards a private place, or to cover playgroup sessions.

The Government will be consulting on whether to loosen existing requirements for adult-child ratios, premises and equipment - a plan which has aroused fears among state and private providers. They may also change the law to make it easier for grant-maintained and other state primaries to open a nursery class.

There will be a “light-touch” inspection to accredit private schools and playgroups, and a consultation on a curriculum. For the moment, there will be no additional staffing requirements - staff outside state schools do not need teaching qualifications. Mrs Shephard was adamant that institutions accredited to accept vouchers must provide education rather than just childcare, but critics fear standards will be patchy.

Graham Lane, education chair of the Labour-controlled Association of Metropolitan Authorities, said the scheme would need a “massive bureaucracy”, and would be open to fraud and abuse. But Sir Christopher Ball, author of the Start Right report which called for universal nursery education, warmly welcomed the initiative. “What has been decided is a commendable first step in the right direction.”

The vouchers will not cover daycare which does not include education, child-minding or, apparently, education at home. The National Childminding Association says the policy “has effectively denied parents the choice of using the new vouchers across the full range of market provision” and could damage the livelihood of 150,000 self-employed child-care workers.