The Pre-school Learning Alliance said findings from a series of Freedom of Information (FOI) requests show that private, voluntary and independent (PVI) early years providers are underrepresented on the majority of school forums.
It found that 70 per cent of school forums in England - which advise local councils on education funding allocations - have the statutory minimum of one representative speaking for the PVI early years sector in their local area.
The organisation has called for legislative change to require local authorities to include proportional representation on school forums, asserting that one PVI representative is too few.
Of the total 352 local authorities in England that received the FOI, 125 provided data showing that the average number of members on a school forum in a local authority is 25.
Government regulations state at least two-thirds of a forum's membership must comprise of representatives from schools and academies.
The final third can be made up of non-school members, including 16-19 education providers, maintained nursery schools, special schools and at least one PVI representative.
However, the alliance's research found that, on average, school and academy representatives account for more than three quarters - 77 per cent - of school forum membership.
It suggested average proportional representation would lead to around 25 per cent of a forum's membership coming from the PVI sector, depending on the local demographic.
Alliance chief executive Neil Leitch said it was "unacceptable" that at a time of pressed education budgets, "the early years sector is so woefully underrepresented on the very panels that advise key funding decisions".
"Our research showed that, on average, schools and academy representatives outnumber early years PVI providers 14 to 1. How is that a fair basis on which to make funding decisions?" he said.
"It is simply not acceptable that in the vast majority of councils, one early years representative is expected to speak on behalf of the entire local PVI sector, while schools and academies make up more than three-quarters of the forum."
PLA inclusion manager Nicola Gibson suggested low representation from the PVI sector is contributing to early years providers having difficulty securing funding for children with special educational needs and disabilities (SEND), and made it harder for providers to challenge funding decisions
She said the set-up allowed councils to lower the base rate of funding they provide to early education settings after removing funds for SEND, which could instead be financed from a "high needs pot" shared with other education providers.
"Proportional representation on school forums is vital to prevent precisely this kind of unfair and unbalanced situation," said Gibson.
PLA's FOI also revealed 29 per cent of local authorities had two PVI representatives on their school forum.
The remaining one per cent was comprised of one council with three PVI members and another with four.