EXCERPTS:
Aides to David Cameron and Nick Clegg are discussing plans that could allow up to a third of childcare costs to be made tax-deductible, potentially saving families thousands of pounds per year.
Ministers are also considering relaxing the restrictions on childminders to
enable them to care for larger groups of children.
The government believes this could help increase the supply of affordable
childcare places and encourage more mothers to return to work.
The reforms are expected to be considered for inclusion in the coalition's
"mid-term review", a planned set piece of new policies intended to
reinvigorate the Tory-Liberal Democrat administration in the New Year.
The plans are believed to include the Conservatives' aspiration to make some
childcare bills - potentially up to a third of costs - tax deductible.
Both sides of the coalition are concerned that high childcare fees are preventing mothers from returning to work after having children.
In October, the childcare minister, Elizabeth Truss, told The Daily Telegraph that she wanted to cut red tape and create more high quality, affordable places in nurseries and with childminders.
The number of childminders in England fell by almost half in recent years, while bills for nurseries are now among the highest in the world, costing up to £15,000 a year.
According to research from the Daycare Trust, the average spent on childcare for 25 hours per week for a child under two is now £5,100 a year.
Earlier this year the Prime Minister indicated that he was open to considering tax breaks for employing cleaners and other domestic help, to encourage more women to return to work after having children.
He was attracted to the policy after hearing about a successful scheme in Sweden.
Before being appointed a minister in September, Ms Truss called for the staff-to-child ratio in nurseries to be eased, and to allow childminders to care for five children at a time instead of three.
She is now understood to be examining whether some of these policies can be implemented at the Department for Education.
According to the BBC's Newsnight, the measures are being driven by Downing Street as it seeks to overhaul how childcare is provided and funded.
Mr Clegg, recently announced that he would make it his priority to use any available money to reduce the cost of nursery places and childminders.
-reprinted from the Telegraph