Chancellor Gordon Brown today announced tax breaks for firms prepared to fund childcare schemes.
He also unveiled an increase in child tax credits of £3.50 a week.
Mr Brown said employers would be able to provide £50 a week for approved childcare for every member of staff - free of both employee National Insurance and income tax and free of employer National Insurance.
Help will also be available for childcare costs when approved care is provided in the child's own home.
And the definition will also be widened to increase the number of approved child carers to whom the £50 a week or tax credits can be offered.
Mr Brown said he expected childcare places to double from 750,000 in 1997 to 1.5 million by 2006.
The Government will also fund school-parent links in 500 communities so children are introduced to learning long before they even go to school.
Mr Brown said there would be 1,000 children's centres over the next five years.
Another key announcement was an increase in child tax credits.
From April the child element will be increased by 13 per cent. Mr Brown said that meant an extra payment for seven million children of £180 a year - an extra £3.50 a week.
The maximum help for the first child will rise to £58 in April, and for two children to £100 a week. Both figures are more than double the amounts in place when Labour came to power.
The Chancellor said the raft of measures was aimed at reducing child poverty next year by one quarter, halving it by 2010 and eradicating it in a generation.
"Nothing is more important to the future of our whole country than that, with the best schooling, services and financial support, every child has the chance to develop their potential to the full" he said.Reuse content