The Government's bold offer of 30 hours a week free childcare has been described as "chaos" on the day it comes into force in England.
The Pre-school Learning Alliance, which has 14,000 members, says a funding shortfall means nurseries across England are struggling make it work.
Nursery provision
Image: Lack of funding means many nurseries are struggling make the scheme work
Chief Executive Neil Leitch told Sky News: "The government's total refusal to tackle, or even acknowledge, the fundamental problem of early years under funding has left providers across the country struggling to find ways of delivering the offer that won't force them out of business."
"Every week we're hearing of more and more childcare providers being forced to shut down as a result of the 30 hours. This simply cannot continue."
Under the new scheme, all three and four-year-olds in England will now be offered 30 free hours of childcare a week, up from 15 hours.
The Government says around 390,000 working parents across the country are eligible for the increased free hours.
At the George Perkins Day Nursery next to Edgbaston cricket ground in Birmingham they are proud of their "outstanding" rating but are trying to work out how they can balance the books.
Nursery worker Kerri Scott says the lack of funding makes staff feel devalued
Image: Nursery worker Kerri Scott says the lack of funding makes staff feel devalued
Suggestions that staff have heard discussed across the industry include a donation box in reception or even offering ironing services for parents that they could charge for.
Qualified nursery worker Kerri Scott says it is demeaning and demoralising.
"As a parent I think it is great that we can offer childcare at a reasonable cost and free to some parents.... but as a practitioner they just haven't thought about how they are going to help the nurseries fund it.
"Another suggestion I have heard is that practitioners work for free for a term....it does make you feel devalued," she added.
Nursery Manager Sarah Presswood told Sky News: "This hang up on it having to be free is causing a lot of tension whereas a number of my parents have said why can't it be a subsidy?"
Education Secretary Justine Greening said: "For too long lots of families really struggled to manage the cost of childcare and that's why we have delivered on our promise to provide 30 hours free - saving working families around £5,000 a year.
"Alongside the support we are giving through Tax-Free Childcare and Universal Credit, it will make a real difference to families' lives."