With Financial Editor Amanda Blinkhorn

Despite the extra Government millions being poured into childcare, British parents are still paying the most expensive childcare bills in Europe.

According to the Daycare Trust (www.daycaretrust.org.uk), a charity which campaigns for better and more affordable childcare, childcare costs have continued to rise above the rate of inflation, and parents say they cannot pay any more.

Their 2004 Childcare Costs Survey found the typical cost of a nursery place for a child under 2 in 2004 is £134 a week (up from £128 a week in 2003), a rise of nearly 5%. This compares to an average household income of £562 a week and average weekly expenditure on housing and food combined of £82 a week.

Londoners, not surprisingly, are bearing the brunt of it, spending, on average £168 a week per child on a private nursery, or or over £8730 a year.

If you don't fancy paying for a private nursery, you could always save a few thousand and spend £6000 a year on a childminder instead.

Only 1 in 8 parents pays for full-time formal childcare at the moment. Most still rely on friends, relatives, part-time nurseries or un-registered childminders.

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