Nurseries in England are struggling to recruit qualified staff putting them at risk of closure, campaigners have said.
Since 2014, the government has said key nursery workers must have at least a grade C in GCSE English and maths.
But campaign group Save our Early Years said there was now evidence that this requirement was blocking staff career paths and deterring new starters.
The Department for Education said it was working with the profession on a future staffing strategy.
Figures from qualifications body Ofqual show about 12,500 students completed the Level 3 Early Years Educator course between July and September 2015, compared with 18,000 in the same period in the previous year - a fall of about 30%.
The course, which takes between one and two years to obtain, enables students to obtain their first jobs in nurseries and work with children aged under five.
'Turn away children'
But industry leaders warn the drop in the number of those completing it is evidence of an impending recruitment crisis, which is already damaging the quality of childcare on offer to parents.
It also puts in jeopardy government plans to introduce 30 hours of free childcare to all three and four-year-olds from 2017, they say.
Under current rules, staff are only allowed to look after a specified number of children:
- Aged one and under - One worker to three children
- Two-year-olds - One worker to four children
- Three and four-year-olds - One worker to eight children or one to 13 if the group is teacher-led.
The government requires that there must always be at least one member of staff qualified to Level 3 on duty, which means these staff are essential to all nurseries.
Julie Hyde, executive director at the childcare qualifications awarding body Cache, said if the government did not reverse its decision, there would be "no nursery staff and therefore parents would have no childcare".
Liz Bayram, chief executive of the charity Professional Association for Childcare and Early Years, said nursery chains were able to move staff around to cover gaps, but sole nurseries would be hardest hit by the crisis, she added.
In the association's survey of 75 Further Education college leaders, almost three quarters (72%) reported that enrolments on Level 3 courses had decreased in the latest academic year (2015-16), compared with the previous year.
A separate survey of 278 private nursery owners and managers across England suggested the main reasons for nursery staff leaving their jobs were low pay and a lack of progression due mainly to the GCSE requirements.
Purnima Tanuku, chief executive of the National Day Nurseries Association, which conducted the poll, said: "The serious staffing problems caused largely by these GCSE requirements can make these businesses unsustainable and force them to turn away children."
'Loved and hugged'
June O'Sullivan provides care for 4,500 children at 38 nurseries across London.
As chief executive of London Early Years Foundation, she is currently grappling with her business's recruitment and retention policy to try to fill 90 vacancies (of her 650 staff) for Level 3 nursery workers.
She fears that unless the government changes the requirements, the industry will end up with more unqualified staff and nurseries will see a high turnover of staff.
"People just don't understand the importance of the harmonious relationship you have to build with the children, their parents and the staff," she says.
If parents can't be sure their children are in safe hands, in a place where they are loved, hugged and taught, this may affect their confidence in going out to work every day, she adds.
Ultimately, there may be fewer nurseries, especially in London, if funds are eaten up paying agency costs. "Nurseries are not great profit makers. There is very little margin," she says.
Former childcare minister Liz Truss introduced the GCSE requirement in 2014 in an effort to raise the quality of care.
But campaigners want the new childcare minister, Caroline Dinenage, to accept equivalent or similar qualifications, such as Functional Skills, which also tests numeracy and literacy.
Neil Leitch, chief executive of the Pre-school Learning Alliance, said: "It seems completely counterproductive to persist with a policy that is actively blocking qualified, passionate and able early years practitioners from entering the sector.
"To say that the GCSE requirement is causing a recruitment crisis is not an exaggeration," he added.
Writing in Nursery World earlier this month, Caroline Dinenage hinted at a possible shift in government thinking, saying: "Our Workforce Strategy is in development and I am looking at ways of getting the best individuals into the profession, while recognising that excellence can be measured by qualities other than exam results."
A Department for Education spokeswoman said: "We want to make sure we get the best staff into the early years sector.
"We are working with the profession to look at how we can develop people's talents and keep our most experienced staff. This is backed up by record investment in childcare - £6bn per year by the end of this parliament."