The new Legal Support Action Plan, published by the Ministry of Justice, follows a post-implementation review of legal aid reforms introduced under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), which cut annual legal aid expenditure by at least £350m from 2013.
It pledges an investment of up to £5m for developing innovative technologies and testing new methods of delivering support.
An additional £3m will also be invested to support those representing themselves through the court system.
As part of a raft of measures, the government will bring forward by the summer proposals to extend eligibility "for non-means tested legal aid for parents, or those with parental responsibility, who wish to oppose applications for placement orders or adoption orders in public family law proceedings".
The plan also extends legal aid to include special guardianship orders, which may be applied for by some relatives, as well as for non-asylum immigration matters for separated migrant children.
A survey of family members with experience of the child welfare and family justice system, carried out as part of a sector-led Care Crisis Review, found that only 17 per cent of the 709 respondents said they had the information and legal advice they needed to understand their rights and options when the local authority was involved with their family.
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Cathy Ashley, chief executive of charity Family Rights Group, welcomed steps to address "some significant current injustices within our child welfare and family law system".
"It is clearly unjust that some parents are not legally represented in proceedings that could result in their child being adopted," said Ashley.
She added: "It is right that the government is proposing to address this iniquity by bringing forward proposals by summer 2019 to extend eligibility for non-means tested legal aid to parents opposing placement or adoption orders.
"It is also clearly unjust that some relatives, such as grandparents or siblings, do not have access to free legal advice or representation when trying to secure a special guardianship order for a child, as an alternative to the child ending up in the care system or being adopted.
"It is therefore right that the government is proposing to extend the scope of legal aid to include special guardianship orders in private law."
Ashley said her organisation was looking forward to contributing to proposals which the government said it would be drawing up by the autumn.
However, she cautioned that many families would still be without the help they need to "maximise the chances of their child living safely and securely within the family network".
Ashley added: "We therefore look forward to working with the Ministry of Justice, Department for Education and the Law Society to securing significantly greater improved access to family legal aid for vulnerable families and extended funding for Family Rights Group's advice service."