Government ministers have been forced into a series of concessions to avert a threat by local authorities to pull out of the controversial pilot nursery voucher scheme.
The changes will mitigate the effects of "market forces" and protect state nursery schools, according to a new report for the Association of Metropolitan Authorities.
But it is still unclear whether the concessions will apply to other LEAs, due to join the scheme once it goes national next April.
The report by Gillian Pugh and Sue Owen of the National Children's Bureau says that the four local education authorities in the pilot felt that participation should not lead to less money for state nursery schools.
The 59-page progress report lists changes which the four have negotiated with the Department for Education and Employment.
They include: * Distribution of voucher income through the LEAs' local management of schools system.
* The opportunity to apply for "supplementary capital approvals" over two years which can be financed through nursery voucher income.
* Ongoing negotiations about flexibility of sessions. For example, should the vouchers be available over a 36-week period only or should there be fewer sessions over 51 weeks to provide a year-long service for children with special needs? Can the five half-day vouchers be used for three nearly full days when there are transport difficulties?
* A guarantee that the phase 1 authorities could have the money taken from them by the Government returned if the scheme does not go ahead.
* Voucher payments made on half-termly rather than a termly basis.
* Allowing headteachers of maintained schools to apply for vouchers on behalf of parents in very exceptional circumstances.
* Grants towards the cost of publicising and administering the scheme.
But the report says that some of these concessions will not be available next year - including the agreement on capital arrangements, and grants for administration.
The four authorities are concerned about nursery inspection and children with special needs. They fear that the expansion of nursery education will lead to children with special needs being labelled at too young an age.
Earlier statementing would trigger demand for more authority support but with no extra money. All four authorities were worried that inspection procedures would not be rigorous enough.
Education vouchers for early years: a state of play, AMA, 35 Great Smith Street, London SW1 3BJ, Pounds 5