As Nursery World revealed earlier this month the future of the York pilot had been in doubt after more than 30 providers pulled out of the scheme citing underfunding.
However, the immediate crisis looks to have been resolved following talks between the council and the Department for Education.
Childcare providers in York will now receive a flat rate of £4 an hour across the 30 hours for all three-and four-year-olds that are eligible for the pilot, although the rate has yet to be confirmed by the DfE.
This is a significant victory for providers who had refused to take part in the scheme at the rate offered by York City Council.
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