Many nurseries are unlikely to extend free childcare places to 30 hours a week, a survey suggests.
At the moment, most nurseries are able to offer 15 hours a week because they plug the shortfalls with government funding.
The Government wants to double this from the autumn, but there are fears this will not be possible for many as they will not be able to cover the cost.
A survey conducted by the National Day Nurseries Association (NDNA) found 45% of nurseries polled said they are likely to extend the number of free hours on offer.
This means that parents will pay a higher rate for any extra hours above that their child spends in nursery.
The average nursery has to absorb around £34,000 a year due to the funding gap, with 89% of nurseries making a loss on free places.
The NDNA said its survey had shown that only a third of youngsters aged three and four attend nursery for more than 30 hours a week.
NDNA chief executive, Purnima Tanuku, said: "The nursery sector and the Government want the same thing. We all want to make 30 free hours childcare workable and sustainable.
"But to achieve this, the sums have to add up. Urgent steps must now be taken to bring about the funding reform promised by the Government, so an economically viable hourly rate for high-quality childcare reaches the front line."