Ofsted, the school standards watchdog, said there was no evidence that setting standards for nurseries did four-year-olds any harm.
Earlier this year, Margaret Hodge, chairman of the Commons Education Select Committee, warned that children taught to read and write too early could lead to exclusions later in their school career.
But a report based on inspections of nearly 10,000 nurseries said there was no evidence that setting out what should be taught in nurseries either made them too formal or pushed out play.
The report also backed schools which have been accepting four-year-olds into reception classes as part of efforts to fulfil Government pledges to offer a school or nursery place to all four-year-olds from September.
Campaigners for nursery schools or playgroups, now described as pre-schools, have claimed that school reception classes have too few teachers and offer the wrong education for such young children.
Inspectors found the "great majority" of reception classes were satisfactory or better, and said their work compared well with traditional nursery schools or playgroups.
The report said: "Sadly, there is a tendency to take the worst examples of work with four-year-olds in reception classes and attack them as though they are the norm when they are not."
They warned that nearly a third of institutions needed to pay greater attention to language, maths and understanding the world, although most weaknesses were "minor"
Some nursery schools did not stretch the brightest children, the report said.
But it stressed that only 2 per cent of nurseries and playgroups failed to reach acceptable standards. Most classes improved in line with inspectors' recommendations."
The report, the first full study of standards in nurseries, playgroups and school reception classes, also said moves to set standards - known as "desirable outcomes" - had improved nursery teaching.
Schools Minister Estelle Morris welcomed the report. She said: "The providers of early education deserve congratulation for what they have achieved.Reuse content