Jamie Shaw is angry. This year he planned to celebrate the 60th anniversary of the nursery school he heads, Henry Allen in Amersham, Buckinghamshire. Instead, he says, he has to fight to save it from closure.

“This threat has come from within,” he says, “from the school reorganisation team. It is the most insidious way of trying to get rid of an establishment, quietly and internally, by a process of stealth.”

Buckinghamshire refutes his allegation, insisting there are no plans to close Henry Allen, despite “an issue” with maintenance. Mr Shaw is not reassured. He knows that one of Buckinghamshire’s original four nursery schools has been amalgamated with a neighbouring primary and the same fate awaits another. The third has a new head . . . on a two-year contract.

Many heads of England’s historic nursery schools share his insecurity. Their sector is shrinking, despite the huge growth of early-years education and childcare. They say they are caught between central and local government. While the former proffers cash - an extra pound;22 million from 2000 to 2003 - the latter sees chances to cut costs.

The Government has tried to help nursery schools by giving them governing bodies and their own budgets. However, campaigners fear that for some these changes are too little, too late.

Nursery schools cater for about 60,000 under-fives, compared with the 356,000 four-year-olds in primary reception or infant classes. And those numbers are rising, despite experts’ doubts about the suitability of such classes for young children.

Private-sector nurseries are also flourishing: up from 2,900 in 1990 to 7,800 last year. Yet nursery schools have seen numbers fall from 520 three or four years ago to about 500 now, according to Jean Ensing, last year’s president of Early Education, the pressure group. This is despite research showing that they - and the new early excellence centres - are the best place for the under-fives, and despite standalone nursery schools still being the norm elsewhere in Europe.

In 1999, early findings from Kathy Sylva’s research on effective pre-school education concluded that nursery schools and combined centres (nursery schools offering childcare) scored highest on all scales, including language and reasoning, and pre-school activities. Playgroups scored lowest.

And a report last year by Professor Helen Penn, of the University of North London, and Eva Lloyd, of the National Early Years Network, found that:

“Most nursery schools are rated by OFSTED as having entirely satisfactory, very good or excellent educational provision, including all those in poor areas. Only six nursery schools achieved less than 80 per cent satisfactory ratings.”

Yet between 50 and 100 of the remaining schools say they are under threat. The Government says this is an overestimate, but it has admitted to “evidence of a trend towards closing maintained nursery schools”.

Eva Lloyd wants closures halted. “The Government is not tackling the key issue, which is its relationship with local authorities. If it issued an edict saying you cannot close any more nursery schools, and if you have financial problems you just come to us, that might help.” She fears that the “illogical” closures will continue.

John Bangs, head of education at the National Union of Teachers, agrees:

“We could lose nursery schools by simple carelessness. The Government appreciates them when its memory is jogged, but local authorities see them as a good cost-cutting operation.”

Some nursery schools have closed because of demographics. Some have become early excellence centres, the flagships of the Government’s lauded early-years policies, combining education and childcare with family services. More than half these centres are former nursery schools - proof, say campaigners, of their high quality. But others have fallen victim to the fact that local authorities are obliged to preserve nursery places, but not nursery schools.

No authority is going to admit to closures because the Government is against them, says Jean Ensing. “So the euphemism is ‘amalgamation’, but that is really closure because the nursery school ceases to be an entity and a nursery class is added to a primary school.”

Burnley, which in 2000 had 13 nursery schools, will have nine next term - two will become nursery classes at primaries.

Another nursery school has been lost this year in Tower Hamlets, east London. And only a concerted campaign last year by parents, staff and the local early-years department saved the five in Ealing, west London.

The Maintained Nursery Schools Forum, which held its first annual conference in London last week, promotes the sector. Many have already moved beyond the twice-daily term-time sessions that the Government’s nursery education grant covers - 2.5 hours per child per day. Using a hotch-potch of largely short-term funding, heads manage to run innovative services for families with young children. But it is hard work (see above).

Some authorities say there are benefits in amalgamating nursery and primary schools. Kim Hart, head of early years in Buckinghamshire, says there is a case for streamlining children’s education. But nursery schools then face the loss of autonomy, and the loss of their head - a figure central to their success.

Such a scenario is familiar to Jacqueline Priestley, head of Harry Roberts nursery school in Tower Hamlets. Already this year the authority has combined the largest of its seven nursery schools, Elizabeth Lansbury, with the adjacent primary.

Amalgamation has been suggested to Mrs Priestley as her school is next door to a primary. Eighteen months ago, she attended a conference where Margaret Hodge, former early-years minister, praised the “excellent practice ... in the maintained nursery sector”. Then she went to a local authority conference where the message was that standalone nursery schools were no longer viable.

Worryingly for Mrs Priestley, there was talk of amalgamating management “wherever feasible”.

“I think we all felt really threatened and confused. I was expecially vulnerable being next to a large primary school. I felt I had to extend our provision and make us better value for money. This is despite our having won two achievement awards and our outstanding OFSTED report saying we already offered value for money,” she says.

So Mrs Priestley acted, securing pound;1.25m capital from the New Deal for Communities and Sure Start initiatives to build baby and toddler rooms, a cr che and three training rooms.

Tower Hamlets now says that amalgamation is not on the cards for Harry Roberts and that it “only expects to discuss mergers where this seems the best way to link up services, and where it is supported by governors and the community”.

Cost is a vexed issue for nursery heads, who say it is too easy simply to call their schools the most expensive for under-fives.

Last year, six heads on secondment to the Department for Education and Skills concluded that, using admittedly “sparse” OFSTED data, there is little cost differential between nursery schools and nursery classes. Also, according to the heads, evidence suggests that 79 per cent of nursery schools give good value for money, compared with 49 per cent of primaries.

High-quality early-years education has never been cheap - but research indicates that it is the only sort worth having.

UNDER-FIVES’ EXPANSION

* Sure Start: 500 schemes due by 2004, supporting 400,000 deprived children under four. Cost: pound;1 billion.

* Neighbourhood nurseries: aim to have 900 in deprived areas by 2004. Providing 45,000 childcare places. Cost: pound;300 million.

* Early excellence centres: aim to have 100 by 2004, “one-stop” multi-agency centres providing childcare, education, health and family services for under-fives. Pilots given pound;200,000 to pound;750,000 over three years. Most current funding from council, childcare and nursery grants.

* Nursery schools: development of services. Funding: pound;22m, 2000-03.

* Other schemes: working families’ tax credit - in 2000-1 expected to help 1.4 million families, up to pound;70 a week for one child, pound;105 for two. Nursery education grant, now for all four-year-olds and two-thirds of three-year-olds. pound;1,188 per child.

SECURITY COMES FROM OFFERING ADDED VALUE

Anne Wilford used to run a nursery school. Now she leads an organisation offering, as well as nursery education, “wraparound” childcare, parenting classes, six playgroup sessions a week, three parent and toddler groups, and baby massage.

A before- and after-school club is run on the premises. She used to open term-time only. Now she opens for 51 weeks from 8am till 6pm. Meals will be available soon. Her school is also a beacon one, so she organises training courses and shares the expertise of her staff.

In many ways Mrs Wilford, head of Crigglestone nursery school in Wakefield, West Yorkshire, exemplifies the Government’s vision of integrated education and childcare for the under-fives.

But she has the same admin support she had 25 years ago, there is no staffroom, and no more money to apply for. While she is optimistic that all the extra services will protect her nursery school from closure, she cannot be sure.

“Hopefully, the local authority would not now decide to take away what we’ve got - but it still could. I think what we offered before was good value for money, but now with all the extra things we do, we would hope to be safe.”