Funding from the Department for Children, Schools and Families (DCSF) will allow parents on the first phase of the pilot projects, which was due to finish this December, to get support until the end of March 2009.
The first phase of the programme, run by the London Development Agency (LDA) involved subsidising the cost of full daycare and flexible care, in all 33 London boroughs.
The second phase involved boroughs bidding for funding to pay for specific projects for their local area. The DCSF has not yet said what will happen to these projects when funding ends in December this year.
In a statement to the LDA, the department said: "The DCSF has agreed it will meet the childcare costs for all parents on phase one of the scheme in the period January-March 2009. It is anticipated that revised funding arrangements will be in place by April 2009. Further information will be available in the autumn."
Denise Burke, head of childcare at the LDA, said: "So far nearly 8,500 children have benefited under the scheme. The project has had a real impact on the lives of many Londoners."
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