This report accompanied an announcement from the Education Secretary David Blunkett of a further 80,000 free places for three year olds.

The next target is for a free place for all three year olds

"The quality of nursery education provision has clearly improved over the last three years," said the incoming head of the Office for Standards in Education, Mike Tomlinson.

But he warned that there needed to be extra training for staff to tackle weaknesses in teaching reading, writing and maths.

The new places announced by Mr Blunkett will include 900 new state-of-the-art "neighbourhood nurseries", which will provide 45,000 childcare places in deprived areas.

The design of these nurseries, which are intended to be the "best facilities and be designed to the highest possible standards" is to be the subject of an architectural competition, Mr Blunkett will announce.

The quality of nursery education provision has clearly improved over the last three years

Mike Tomlinson, head of Ofsted

The extra nursery places will be funded by the �986m made available in this summer's comprehensive review of spending - with a projected annual running cost from 2004 of �2bn for places for three and four year olds.

At the last general election, the Labour party promised a free nursery place for all four year olds - with the dual aim of giving children a good start at school and improving employment chances for their parents.

And the target of a free nursery place for all three year olds has already been set for 2004 and seems set to be a manifesto promise for the next general election.

"Nursery education plays a big part in providing children with the pre-literacy and social skills that are essential for their future progress," said Mr Blunkett.

"We've already created over 120,000 new free nursery education places for three and four year olds since 1997 and will create a further 80,000 places next year."

But the Conservatives have claimed that the government's promise of an expansion in nursery schools is an attempt to recover from places lost since Labour had taken office.

"David Blunkett's announcement smacks of a panic reaction to his own government's figures that show there are over 30,000 fewer pre-school places under Labour," said Conservative education spokesperson, John Hayes.

"Under his government there are 44,800 less childminder places and 3,000 fewer day nursery places," he said.