An "illogical" 70% recommended funding cut for playcentres has left the service anxious about its future.
The Early Childhood Education Taskforce, established to give the Government independent advice about spending and learning support in the sector, recently recommended the change.
Consultation on its report closes early next month and the Otago Playcentre Association will publicise the proposed cut, and the importance of quality education, at a rally in the Octagon, Dunedin, on Friday.
Association adviser Alan Somerville described the proposal as "highly illogical".
"The taskforce is quite right to emphasise the great importance of early childhood education, along with the value of parent engagement and support for parents.
"That's exactly what play centres provide.
"However, the taskforce goes on to relegate play centres to the much lower 'non-core' level of funding."
Under this non-core level, funding of more than $13.5 million in the 2009-10 financial year would be reduced by up to 70%.
Some centres "could not operate at all and others would find that the service really deteriorated".
The association, which covered 38 centres in Otago, would be "devastated", Mr Somerville said.
A spokesman for Education Minister Anne Tolley said the Government supported diversity in the early childhood education (ECE) sector, including playcentres, to which the 20 hours scheme was introduced last year.
"The taxpayer is investing $1.4 billion in ECE funding in the year ahead, and the Government is totally committed to a quality early childhood education system that works for all children and families."
