Priority will be given to children in areas of greatest social disadvantage.

BBC Education Correspondent Sue Littlemore: Only a third of under-fives get free nursery provision

The government has met already its 1997 election commitment to a free nursery place for every four-year-old whose parent wants one. But ministers have been criticised over the number of four-year-olds in over-sized primary school reception classes, as opposed to purpose-built nursery classes or playgroups.

The Education Minister, Margaret Hodge, said none of the extra places for three-year-olds would be in reception classes. They will come from local education authorities working with the private and voluntary sectors in so-called Early Years Partnerships.

"We expect that the places will be of high quality," Ms Hodge said. "We have made clear that the places should not be in reception classes and that they must be appropriate for children of this age."

Providers of government funded places for three-year-olds would have to work towards specified "learning outcomes", and be inspected by the Office for Standards in Education.

Training

Ms Hodge said it was "absolutely essential" that the quality of staff working with three-year-olds be maintained, which was why a new fund for the training and development of early years staff had been established.

Too young for formal education?

Explaining the targeting of the new grants on areas of social and economic disadvantage, Ms Hodge said: "Nursery education brings the greatest benefits to disadvantaged children, so we are giving preference in the first year to helping 50 authorities in areas of greatest social need."

The whole area remains controversial, however. Some educationists question the value of formal education at such an early age. Some parents try to send their children to popular schools' under-fives classes to try to get an early place on the waiting list.

Benefits for working parents

The Minister for Women, The Rt Hon The Baroness Jay, welcomed the development.

"Children benefit from interacting with other children of their own age, and this measure will help them to do so," she said.

"But there are benefits for parents as well. The parents of young children who are already in paid work may find that the availability of good quality care for their children helps them to balance more effectively their working and family lives.

"Those parents who do not work but wish to do so may find that access to an early education scheme helps them to overcome one of the biggest barriers to employment."