British parents pay the highest childcare fees in Europe while places are at a premium. Women's Editor CHRISTEN PEARS reports

FIVE-year-old Matthew Hutchinson has just started school but because his mum, Diane, works full-time, he relies on a childminder to pick him up. It costs Diane £16.50 a day. "Before he went to school, Matthew used to go to a private nursery, which cost £18 a day. I drop him off at school but I need the childminder to look after him for a couple of hours afterwards. It's almost as expensive as the nursery," she explains.

Diane, who is a finance worker at South Bank Women's Centre, is a single mum so she qualifies for the Working Family Tax Credit. It provides her with £35 a week towards childcare costs but she still has to find around £50 a week herself.

She says: "I'm quite lucky in a way and, to be honest, I would find it really difficult to manage without Working Family Tax Credit because the childminder takes a huge chunk out of my wages. I think some women would be put off working because of the costs. By the time they've paid for childcare, it doesn't leave them with anything for themselves."

Figures published by the Daycare Trust show that, in the North-East, the average cost for a full-time nursery place for a child under two is £103 a week - more than £5,300 a year.

It's a lot of money, particularly if you're on a low wage, and some parents find it prohibitive, choosing not to work because they know their earnings will go straight back out to pay for childcare bills.

According to the survey, childminders charge, on average, £96 a week, while the cost of an after school club is around £30.

Parents on low wages receive help from the Government in the form of the Working Family Tax Credit. This is worth up to £94.50 per week for families with one child and £140 if they have two or more. Parents pay a quarter of the cost of childcare and the Government pays the rest.

But while this helps families on low incomes, there is no help for those who don't work. This makes it difficult if parents need time away from their children to look for a job or re-train.

Stephen Burke, director of the Daycare Trust, says: "British parents face the highest childcare bills in Europe. Despite the investment made since the National Childcare Strategy was launched in 1998, parents still face a daily struggle to find - let alone pay for - quality childcare."

In many areas, there are simply not enough nursery places to meet demand. Janice Duffy-McGhie owns Kirklands, a small private nursery in Barnard Castle. With only 20 places, competition is stiff and many parents put their children on the waiting list as soon as they're born. When Janice opened Kirklands 18 years ago, she just held morning sessions but the demand has grown steadily.

"Because we're in a rural area, the need for places is different from that in, say Darlington, or other towns," she says. "A lot of parents have families around here who help look after the children so not all of them are working mums. But as well as full-time children, we also have some who just come for a few sessions a week.

"It helps prepare them for when they go to school. Nurseries have to be Ofsted inspected so all the activities we do are curriculum-based, which means it's educational as well as social."

Fees at Kirklands are based on what childminders charge and are £2.10 or £2.30 an hour, depending on whether the child attends throughout the year or just during term time.

Janice doesn't want to increase her fees but she would like to pay her staff a better wage. "I would love to see a Government subsidy for nurseries. It's not really recognised as a profession, which makes it very difficult to recruit, particularly in rural areas. I would love my staff to have top whack wage but I can't afford to do it because it would fall on the parents."

Durham County Council's Early Years Development and Childcare Partnership is working to tackle the shortage of childcare staff and plans to create 600 new places throughout the county in the next couple of years.

Peter Kiernan, Early Years Business Support and Marketing Officer, says: "Training is a major part of what we do. We try to let people know what opportunities are available and whether there is any funding for them. The take-up has been very high so far but we still need people to take it up as a career.

"One of the key things we are trying to do is increase the number of childcare places in areas that don't have the facilities they should, disadvantaged areas where there is high unemployment. We see the lack of childcare places as a barrier to parents who want to go into work."

Durham County Council also operates its own Childcare Information Service, which offers parents access to a wealth of information . The dedicated line receives between 300 and 400 calls a month.

Mr Kiernan says: "Childcare is a major issue and there are a lot of parents who find it difficult either to find places or pay for the childcare they need. Demand is increasing all the time and we are always looking for new solutions."

* Durham County Childcare Information Service's inquiry line is open from 9am to 4.30pm Mondays to Thursdays and 9am to 4pm Fridays. The number is 0845 602 4469.