Nearly 750 child care providers fear they may have to close down because of the government's plan to introduce 30 hours of free nursery provision, according to a survey conducted by the Pre-school Learning Alliance.
Under the government's proposed plans, the amount of free child care for three and four-year-olds will double from 15 hours to 30 hours for 38 weeks a year by 2017.
But 1,500 providers surveyed about the possible impact of the scheme believe it will have a detrimental effect, with 49% saying they thought there was a risk they would close as a result of the entitlement offer.
Half of the providers said they did not feel confident that they have the capacity to meet the demand for places under the 30-hour offer, and 58% expect the offer to have a negative financial impact on their business.
Almost all of the providers (98%) said they currently offer the 15-hour free entitlement, but 19% said they were not planning on offering the 30 hours, while 51% said they were not sure.
These figures are a stark warning of what could happen if the Government insists on rolling out an underfunded, under-resourced free entitlement offer.
The online poll also found that 48% of providers felt they would have to reduce the number of places they offered to other age groups, if they delivered the extended entitlement.
Mr Leitch said the Government had chosen to "turn a blind eye" to concerns about whether it has the capacity to deliver the offer.
A Department for Education spokesman said: "We have already carried out an extensive consultation with the sector and have undertaken the most comprehensive analysis of this market ever.
"As a result, we will be increasing the average funding rate paid to providers through an additional £300 million per year. We will also be consulting on fairer funding allocations, including the introduction of an early years national funding formula, and making sure more money reaches the front line instead of being top-sliced by councils."