According to the report, leaked to The Independent last night, the Education and Employment Select Committee believes that vouchers will not boost private and voluntary nurseries. In fact, they may squeeze them out of the picture.
The revelation is bound to prove damaging to the Prime Minister, who has personally promoted vouchers and who hoped they would boost his party's election chances. Under the scheme, piloted in four local authorities over the past year, parents of all four-year-olds will receive pounds 1,100 in vouchers for their education from 1 April, four weeks before the general election.
The report has caused a split among Conservatives on the committee, some of whom felt it was far too critical of the scheme. It was finalised last night after weeks of wrangling and should be published before the election.
Based on studies of the four pilot areas - Kensington and Chelsea, Wandsworth, Hammersmith and Fulham and Norfolk - it says that even where there has been some success, it is too early to say whether it will be repeated throughout the country.
The four aims of the scheme, according to the report, are to promote parental choice, to ensure good quality, to extend pre-school provision to all four-year-olds whose parents want it and to safeguard the private and voluntary sectors. Its conclusions cast doubt on every one of these.
The primary problem, the report says, is that the scheme has led to more four-year-olds being recruited into reception classes by schools anxious to safeguard both pupil numbers and funding. This has adversely affected its chances of success in every one of its objectives. Parental choice "would not be enhanced" if schools took more pupils to the detriment of nurseries and playgroups, it adds.
The report goes on to contradict claims by the Department for Education and Employment that the problem might not be as severe as had been suggested. Most local authorities have already changed their admissions policies in order to take more four-year-olds, it adds, and have thus put private and voluntary providers at risk.
Even the ministers in charge of the scheme accept that vouchers have made little difference to parental choice. Families in rural areas have had to accept whatever is available locally, while nurseries and schools in London say they cannot offer extra places because they have no room to expand.
The portents are "mixed" on whether the scheme will increase available places. However, the report details evidence that some local playgroups and private nurseries may be forced to close. "Overall, evidence ... remains inconclusive on the likelihood of the scheme significantly expanding provision for four-year-olds," it says.
On quality, the report is particularly damning. The primary school reception classes in which most pupils will find themselves may well not provide proper nursery education.
Their classes are often too large, teachers inadequately trained and facilities inappropriate. And while they may be able to cater adequately for pupils who are almost five, they are unlikely to do so for those who are only just four.
"Such classes may not be appropriate for their educational needs and therefore may not be providing high-quality education," the report says.
Basic standards set by government advisers are treated as the norm, rather than the absolute minimum, in many schools and playgroups, it suggests. This, too, "could be detrimental to the quality of education".
Far from helping the private and voluntary sectors, as John Major himself hoped it would when he announced the voucher plan at the Tory Party conference in 1994, the scheme is actually likely to make life harder for them, the committee says.
There was evidence that state primary schools "were pressuring parents into taking up places ... The overall effect of the scheme was to hoover all four-year-olds into schools". And "instead of increasing provision in private and voluntary settings [the scheme is] actually threatening their viability in many cases," it says.
The report adds that the scheme is time-consuming and involves "a considerable amount of work" for schools.
David Blunkett, Labour's education spokesman, said last night that the report was "a damning indictment" of this crucial Tory policy. "That is why Labour is proposing to replace it with sensible planned partnerships at a local level," he said.
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