Some schools are unaware of a massive shake-up of nursery funding next April that could cause staff cuts, according to a government report.
All three and four-year-olds are currently entitled to 12.5 hours of early education a week, but this is due to be extended to 15 hours a week from September 2010.
As a result, all local authorities have been told to draw up an "early- years single funding formula", to be implemented from April 2010.
The changes could mean schools have to cut the number of nursery staff or the amount they are paid.
The Department for Children, Schools and Families published guidance this week on the lessons learnt from the 11 authorities that have already piloted the switch.
"Local authorities must ensure that their maintained sector providers are fully engaged, as there is some evidence that schools have not realised that the changes will affect them," it states.
The guidance also recommends that authorities may need to talk through the changes on a one-to-one basis with nurseries that "face particularly difficult issues".
The single funding formula should ensure that all nurseries and schools receive money according to the actual number of children who attend rather than the number of places they offer, as some do now.
This does not mean that all institutions will be funded at the same hourly rate. One or more base rates will be introduced, then extra money will be given to reflect factors such as deprivation and premises costs.
The guidance states that the "most significant implications" will be for state schools and nurseries "where place-led funding has hitherto been the norm for early-years provision, and where settings have been running with spare capacity".
North Yorkshire, one of the pilot authorities, estimated that it spent Pounds 1.2 million each year on "empty" nursery places. The authority agreed that the money could remain in the early-years budget, but it must be distributed differently.
Judith Walls, North Yorkshire's finance manager for school-related budgets, said the authority recognised the fact that different institutions had different average salaries and staffing ratios. Some school nurseries were "well below" full, she said, so the authority had introduced a three-year transition period to reduce the impact of switching to the new funding system.
"A small number of our schools will need to review staffing where they had previously been overstaffed based upon the number of children attending their nursery classes," she said. "But at least the transitional funding and the support from local authority officers will help them over this difficult period.
"It has not been easy and there are difficult issues to face, but I do believe we try to support our schools and providers as much as possible and work with them on developments."
Tricia Lord, head of Otley Street Nursery in Skipton, said she felt the authority had acted fairly.
"But I still think there are a lot of issues that we're almost not aware of yet," she said. "The changes mean there is now increased competition for children. That is something that does concern me - not just for myself, but for private providers.
"If schools start taking children into their nursery classes earlier, then that could put private providers under pressure, and if they go under, then that will reduce parents' options."