An online petition, started by owner of Little Hands Montessori Shaza Haq, calls on the government to increase funding levels for the 15 and 30 hours funded childcare offer, "for settings to survive".
The petition now has more than 14,000 signatures.
Providers are already underfunded by more than £600m, according to independent analysts Ceeda, and are set to take a further hit when they are required to increase wages in April.
The government, which replies to parliamentary petitions when signatures exceed 10,000, responded saying it was continuing to closely monitor the market.
The response cites the National Audit Office's description of the Department for Education's review of childcare delivery costs, as "thorough and wide-ranging".
However, a Freedom of Information request by the Early Years Alliance, found that the 2015 review was based on just 282 responses received from a survey sent to 1,821 childcare providers.
The government adds that it will soon publish a "second comprehensive review of provider costs" by research group Frontier Economics.
Neil Leitch, chief executive of the alliance (formerly the Pre-school Learning Alliance), said: "It's incredibly disappointing, though not surprising, that the government has responded to this important petition by falling back on the same tired lines to justify its continued underfunding of the early years sector.
"The response once again makes reference to the fact that the National Audit Office described the Department for Education's review of childcare delivery costs as 'thorough and wide-ranging', conveniently ignoring the fact that the description was based on the incorrect understanding that the review was based on financial evidence from 2,000 childcare providers.
"What's more, the government refuses to take any action until their next cost review is published, despite the fact that independent analysts Ceeda have already shown there's an almost two thirds of a billion pounds shortfall in funding, and that the government's own-commissioned surveys have acknowledged that providers are struggling to remain sustainable.
"The government is well aware that the sector is struggling - but instead of treating this petition with the respect it deserved and committing to finally tackling inadequate funding rates, ministers choose to bury their heads in the sand once again.
"We urge the Department for Education to stop stalling and start dealing with this problem: the sector simply does not have time for the government to drag its feet on this issue any longer."