The founders of a new nursery in Sheffield insist there is no need to charge parents so-called 'extras' to cover the cost of providing 30 hours free childcare.
The Government is doubling the amount of free childcare available to working parents from September, with the August 31 deadline for autumn term applications looming.
Nursery leaders have warned free childcare places in Sheffield are limited as the £4.07 an hour being provided by the council is not enough, and some nurseries are charging for services which were previously free like lunches, nappies or activities to cover the costs.
But the husband-and-wife team behind Nether Green Nursery, which opens on September 4, say they have plenty of spaces for parents wishing to take up the offer - and they insist they will not be charging what they call 'extras'.
The new nursery is at the Beacon Methodist Church in Nethergreen Road, where Fulwood Nursery closed suddenly in February, with the owners blaming 'financial reasons'.
Its founders Edward and Louise Burdall already run Little Imp Pre-School in Hillsborough and Parkhead Cottage Nursery, on Ecclesall Road South, which is rated 'outstanding' by education watchdog Ofsted.
"Some nurseries aren't offering the 30 hours of free childcare at all or are limiting places because they don't think the local authority is providing enough to cover the cost," said Mr Burdall, who is on the Sheffield Schools Forum.
"Others are charging for extras like lunch and tea, or for providing nappies, which used to be free.
"We have lots of spaces for children to get 30 hours of free high-quality childcare and we're not charging any extras.
"We believe that's perfectly achievable with the money available from the council, and we've proved that at Parkhead, which will be the model for the new nursery. It's about running a good business and keeping costs and wages down."
The new nursery is currently registered to take 54 children but the owners believe that could be increased to accommodate around 70 if the demand is there.
Mr Burdall said he believed it could provide 30 hours of free childcare to around 30 children.
The 30 hours of free childcare are available to working parents of three and four-year-olds.
Local authorities are required to give nurseries at least 90 percent of the £4.30 an hour they receive from the Government, with Sheffield Council providing £4.07, but some operators say this does not meet the cost.
The Sheffield National Day Nurseries Association has criticised funding levels and said some providers were having to limit Free Early Learning places to avoid making a loss.
It advised parents earlier this month to apply for places as early as possible to avoid missing out.
But Sheffield Council has said it is confident the vast majority of childcare providers are offering parents the 30 free hours.