The Scottish Government has now scrapped its advisory floor levels on the funding that councils should pay providers offering free childcare sessions.

The NDNA said this would leave councils with full powers to determine funding and could lead to those nurseries in the private and voluntary sector receiving less money.

NDNA chief executive Purnima Tanuku said: "We understand that the Scottish Government hopes this will give local authorities greater freedom. However, without stringent guidance stressing the importance of equality across sectors, private nurseries could effectively lose out under the system."

She said councils were already facing severe financial pressures to hit a Scottish Government target of extending free entitlement by 2010 from 475 hours to 570 hours a year.

Earlier this month, Edinburgh Council admitted it would struggle to meet this target, saying it would cost an extra £800,000 a year to implement.