The government will create 120,000 more childcare places by 2008, it has announced in its spending review.
2,500 Children's Centres planned by 2008
The target was part of a sprinkling of measures aimed at mothers, working parents and reducing child poverty.
Chancellor Gordon Brown said 500 areas in the UK would pilot the extension of nursery education to two-year-olds.
He also revised a target of 1,700 Children's Centres - which provide integrated support for low-income families - to 2,500 by 2008.
A 10-year strategy for childcare will be published in the Pre-Budget Report later in the year, he added.
Kate Green, chief executive of the Child Poverty Action Group, said big and sustained measures were needed to tackle child poverty.
She said: "Despite the government's progress in tackling child poverty to date - and encouraging announcements today such as new investment in social housing and child care - it is now time to shift up a gear if real,
sustainable, and long term progress in tackling child poverty is to be achieved."
Alongside the spending review, Mr Brown published a Child Poverty Review, the outcome of a consultation into tackling child poverty, announced in his budget in 2003.
The review proposes more measures to "make work pay" for low-income families, and a new set of targets to reduce child poverty.
The government has set a long-term goal of reducing child poverty by a quarter by April 2005; halving child poverty by 2010 and eradicating it by 2020.
Mr Brown said the government was on course for the first target.
However, some campaigners are concerned about changes to the way child poverty will be measured, announced in December.
They fear the new measures, which will bring the UK into line with Europe, will shift the goal posts and could underplay the problem.
One campaigner, speaking after the review's publication, said the "judgement is out".