Town-hall officials are set to claw back thousands of pounds of nursery voucher money, according to playgroup and nursery leaders who say that councils are punishing the private sector.
Some education authorities are taking up to Pounds 200 of the Pounds 1,100-a-year voucher for training, claim the nurseries, which means that less money will be spent directly on children.
Although the Government has abolished the Conservatives' nursery voucher scheme, the figure of Pounds 1,100 to provide a part-time place for each four-year-old was expected to stay the same.
But at least two authorities, Leeds and Kirklees, are holding back a percentage of the money after the Government advised them it would be lawful to do so.
Both the National Private Day Nurseries Association (NPDNA) and the Pre-school Learning Alliance say they are concerned.
Leeds originally proposed funding nursery education at Pounds 300 per child per term and keeping back Pounds 66 for training staff in the private and voluntary sectors, but nursery and pre-school leaders thought this figure was too high. Discussions are continuing.
Rosemary Murphy, the NPDNA's chairman, said: "Education authorities are being encouraged to 'top-slice'. Up to Pounds 66 per term is being suggested. If it is Pounds 66, we will only get Pounds 300 per child, per term.
"Who will pay the extra Pounds 66? We have a staff:child ratio of 1:8. Pounds 66 is a lot to spend on training each term. It is as if the private sector is being punished."
Kirklees has decided to pay nursery providers Pounds 350 per child per term, keeping back Pounds 16 for training the private and voluntary sectors.
Nursery leaders have agreed that a small pool of money for training is a good idea.
Tension between the private and voluntary sectors in some areas is adding to the problem. The private day nurseries argue that they are small businesses with overheads already cut to the bone.
They say that playgroups, many of which function with unpaid staff in church halls, are not entitled to such large sums now.
But Anne-Marie Graham, head of the Kirklees early-years service, said: "That is not reasonable. Children have the right to similar kinds of conditions and one of them is paid staff."
Some money will also be needed for the Government's proposal for qualified teachers to oversee all nurseries and pre-schools.
The proposal, which is outlined in the Government's draft guidance on nursery education, states that an early-years specialist should be involved in all nurseries and pre-schools either as a consultant, a teacher or an adviser.
The Government told chief education officers in May: "When funding the private and voluntary sectors, LEAs may - where appropriate - fund places at less than the value of Pounds 366 per term for five sessions a week.
"However, where this is the case, any surplus funds must be spent on the education of four-year-olds in the private and voluntary sectors through, for example, a peripatetic teacher or LEA-run training courses."