CHANGES to nursery funding in Medway has left a divide between private and council-run pre-schools.

As part of council cost-cutting, the budget for private pre-schools has been frozen to save £108,000. Pre-school owners across Medway now face the threat of debt, as their outgoings increase and their income remains the same.

Jackie Anderson, who runs the two Buttercups pre-schools in Walderslade, said: "It's really going to leave us on the breadline and is total discrimination.

"While our funding is frozen, the council is increasing our business rates we will pay £6,500 this year and we don't get much back for that; we even have to pay extra to get the rubbish collected. It seems like a tactic to get children away from private pre-schools."

Many pre-schools will have to ask parents to pay a top-up fee to meet the shortfall.

But owners and parents said they are not going to accept the funding freeze without a fight and will meet tonight with Gillingham MP Paul Clark at Woodlands Primary School to find a way forward. The issue will also be discussed at a council meeting on April 22.

A Medway Council spokesperson said: "At its budget-setting meeting, the council did decide to freeze the annual rate of the nursery education grant for 2004/05, keeping it at the same rate as 2003/04."

The council will pay the same amount to children in private nurseries as last year, but children at school nurseries will have more spent on them because the schools request it in their budgets.

Because there are more children entering pre-school education, the budget has increased by £60,000, to £4.371m, which reflects the increase in parents taking advantage of free nursery education.

The spokesman added: "Medway Council pays nursery education grant funding to 130 private and voluntary (non-maintained) pre-schools and nurseries in Medway.

"This term, there were 3,607 three and four-year-olds receiving funded nursery education in non-maintained pre-schools and nurseries and 2,664 three and four-year-olds receiving free nursery education in Medway's maintained schools.

"The freeze was one of a number of tough decisions that members faced when setting the budget for the next financial year."