More families will have "access to full time day care".

The three-year London Childcare Affordability Programme wants to get more parents back to work by reducing daycare costs.

It also hopes to encourage employers to offer more flexible and part-time care.

The London Development Agency, which is partly funding the scheme, said childcare costs in the city were rising faster than anywhere else in the UK.

Funding is now in place which will ensure that more families will have access to full time day care - this could be the equivalent of an extra �1,500 a year for some families Mayor Ken Livingstone

Manny Lewis, the agency's chief executive, said: "For many London families the prohibitive costs of quality childcare act as a barrier to employment.

"We will provide childcare that is cost effective and available at times that enables them to contribute to the London economy."

London mayor Ken Livingstone, who launched the scheme with Children's Minister Margaret Hodge on Tuesday, said the investment would help thousands of families across London.

"Funding is now in place which will ensure that more families will have access to full time day care - this could be the equivalent of an extra �1,500 a year for some families," he said.

"There will also be much-needed flexible childcare for part-time workers."

Funding will also come from the government's Sure Start programme which has provided affordable childcare, support and advice since 1998.