Children Now has learned child tax credits would be retained for the duration of a third Labour term of office despite widespread criticism from parents and childcare providers.
"From the Government's point of view it is a good option and, they would argue, targets money where it is most needed," said one source close to the Department for Education and Skills.
Childcare providers say they are losing out because tax credits are open to fraud. Family welfare campaigners complain they don't serve the worst off, including the unemployed and parents with more than two children.
Stephanie McKeon, an advisor for Working Families' helpline, said many parents still could not afford to go out to work.
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