More than a quarter of parents in England pay for childcare they should be getting free, research suggests.
Children are thought to benefit from good care in the early years
All three and four-year-olds in England are entitled to 12.5 hours nursery education for 38 weeks a year, funded by a government subsidy.
But a study for the Day Care Trust found 28% of parents interviewed in a large-scale survey in 2004 were still being asked to pay a fee.
Children's Minister Beverley Hughes said this was not acceptable.
The report said the results raised "the question of why over a quarter of families were being charged for something that had already been paid by the government".
It added: "Some providers argue that they have to charge a top-up fee for what is meant to be the free entitlement because government funding is not sufficient to cover the cost of provision.
"It is also possible that parents might be charged for requiring some flexibility in the way they use the 12.5 hours for example if they need longer sessions over fewer days, as currently the entitlement is to five 2.5 hours sessions."
The figures do not include those who have been asked to pay for extras such as lunch, refreshments or trips.
Ms Hughes said: "The free early education entitlement should be exactly that - free at the point of delivery."
She stressed that the government's £3bn funding a year more than covered nurseries' costs.
"Charges of any kind risk excluding those children who have most to gain from free early education and creating a two tier system, where only the better off have choice about where to take their free entitlement.
"We expect local authorities to ensure vigorously that top up fees are not charged by any providers in their area."
However, the report added that some providers say it is not financially viable for them to offer parents just 12.5 hours a week and so only offer the free entitlement as part of a package.
And some nurseries will only allow parents to use the entitlement as five morning or afternoon sessions, for example.
But the Department for Children, Schools and Families said there were no restrictions on how the entitlement may be used and that it was up to local authorities to ensure there was a range of provision available.
The results are based on a survey carried out in 2004, before the government sent out guidance confirming "top-up fees" were not permitted.
The free entitlement was designed to give parents who could not otherwise afford to send their child to a nursery the chance to do so.
But the report also suggested that a tenth of those in non-working or low-income families were failing to access the free places.
It found the strategy to expand early years education had largely worked well.
But barriers to accessing childcare such as "cost and flexibility" were still being reported.
Parents faced bills of nearly £8,000 a year for full-time nursery places for children under two, with costs reaching £20,000 in some areas of England, the report said.