Government caves in over Ofsted registration fees

But children's minister Beverley Hughes has only agreed to slowly raise fees until 2010, when they will be reviewed again.

Speaking at the annual conference of the National Day Nurseries Association (NDNA) in Manchester, Hughes said the government had decided to increase Ofsted fees gradually under a system of banding.

She said: "I believe this will give reassurance and bring stability to the sector, whilst helping providers manage change."

The move has been warmly welcomed by the sector. Steve Alexander, chief executive of the Pre-School Learning Alliance, said: "The minister's announcement shows the government is listening to the concerns of providers."

Andrew Fletcher, director of communications at the National Childminding Association, added: "The childcare sector is going through considerable policy change with the introduction of the Early Years Foundation Stage and we are pleased the department has listened to these concerns and decided to pursue the more proportionate fee increases."

Purnima Tanuku, chief executive of NDNA, said: "Members had huge concerns about the impact of the proposed fee increases upon their sustainability and potential increases for parents, and many felt it was a threat to viability."

The three bands will be: childminders, sessional or after-school care, and full daycare. Fees for the first two will increase by £5 a year to 2010, and fees for full daycare will increase by £20 a year.