A major study into child care in Britain is calling for parents to have the option to be paid to stay at home to look after their children.

The study by the Childcare Commission is also calling for up to 10,000 new childcare centres to be set up, catering for children up to 16-years-old, and offering nurseries, playgroups, out-of-school clubs, childminder networks and childcare information.

Parents should be offered "generous financial support" in the first three years of their child's life to spend on caring for the child at home themselves or for care by other relatives or in formal arrangements such as nurseries.

The Government said it welcomed the report but that it was already implementing many of the proposals.

Education and Employment Minister Margaret Hodge added that some of the proposals were "extremely expensive".

Options outlined in the year-long study include an increase in child benefit for children up to three, a new "toddler tax credit" for the first three years and a transferable tax allowance during the same period.

The report, which drew upon research with parents, children and employers across the country, puts forwards proposals including tax relief for childcare on the basic rate of up to £2,000 for childcare expenses and tax breaks to encourage employers to help their employees with childcare.

But the Commission - which calls for a new Government department to oversee the "integrated childcare system" - has stopped short of urging changes in the law to make employers responsible for the provision or payment of child care.

Unveiling the report yesterday, former Social Security Secretary Harriet Harman, chair of the Childcare Commission, said: "We are quite up front in saying that this needs to move up the agenda of public policy priorities.

"This area needs to take its place as a recognised priority alongside transport, hospitals and schools. It will require new investment and a new focus for public policy.

"Parents have to be in the driving seat in the very early years. The job of government is not to make decisions as to how a child aged one or two has to be cared for. The job of public policy is to make sure that parents have a choice."

The Commission, an independent body set up by the national charity Kids Club Network, included representatives from business and other campaigning groups such as te Day Care Trust.

Former Conservative minister and father-of-six Edward Leigh MP was a member. He told the press conference: "The best security for a strong marriage is strong support for parents to be able to look after children in the way that they choose.

"What we are talking about is a very humane solution, the fact is that in the modern world people want to mix and match."

Ms Harman said the proposals had not been costed but represented "the direction in which we thought policy should go".

Mrs Hodge added: "It is important not to rule anything out prior to a Budget but clearly some of these proposals would be extremely expensive."