Parents whose children attend nurseries in East Lothian where the council has withdrawn funding have been told concerns had been raised about the group's "overall approach to inclusion".
East Lothian Council this week confirmed it was n ot renewing its 1140 hours contract with Bright Stars Nursery Group after what it called "several months" of talks.
The decision means 151 children who were receiving the free hours will have to find them at an alternative nursery or their parents will have to pay the fees.
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Bright Stars said it was "dismayed" by the decision.
However the council's head of education Nicola McDowell, who initially wrote to parents to say the decision had been taken after "careful consideration", has today sent a second letter providing more detail behind the decision.
And she has criticised Bight Stars for issuing "incorrect and misleading" communications to parents.
In the second letter Ms McDowell said: "Following concerns raised about Bright Stars Nursery group’s overall approach to Inclusion, East Lothian Council sought further information on documentation that guides how all children in its care are supported, including its approach to Getting it Right for Every Child (GIRFEC).
"Despite several attempts, the council was unable to gather sufficient information that gave assurance on the approaches taken to support all children."
It had been claimed by some parents that concerns were raised after two autistic children attending one of the nurseries were excluded following an incident early in the summer.
Asked about the allegations this week, as well as claims the group had told parents it could not accommodate additional support needs children in the local nurseries, a spokesperson for Bright Stars denied any such policy was in place.
She said: "Bright Stars Nurseries care for a significant number of children with additional needs and our priority is to provide safe, high-quality care and support to every child.
"On very rare occasions, depending on specialist staff expertise and experience, we may have to advise that in the best interests of the child and other children in the nursery that we cannot provide the additional support required."
Bright Stars had earlier expressed its dismay at the council's decision to withdraw funding for its three Pear Tree nurseries in Haddington and Pumpkin Patch Nursery, in North Berwick.
The group said it would fund the free 1140 hours for the 151 children affected itself until Christmas, urging the council to review its decision by them.
In a statement the group said: "We are dismayed by this decision by East Lothian Council which we feel is not supported by sound evidence and is not in the best interests of families in Haddington and North Berwick, and we urge the council to reconsider.
“As part of our commitment to putting the interests of the children in our care first, and to provide stability to our families, Bright Stars Nurseries has undertaken to make up the additional financial burden of over £362,000 which would have been received from East Lothian Council, to cover the shortfall in funding for all eligible children until we break for Christmas.
“We believe this will offer sufficient time for the council to see what quality care and education means to us, giving them the confidence that the safety, care and education of the children they are funding is in the best possible hands."
However in Ms McDowell's letter to parents she made it clear discussions over concerns about the nurseries had been ongoing since Bright Sparks took them over in July this year and said there would be no plans to change the decision this year.
She said: "Communications issued by Bright Stars Nursery Group have, in some instances, been incorrect or misleading.
"For example, we are aware it has been suggested that our decision came as a surprise – despite several months of engagement with the company with a view to securing an outcome.
"Unfortunately, Bright Stars Nursery Group have been unable to provide sufficient assurance that the necessary improvements could be made and as a result were unable to allay concerns regarding leadership, management and governance.
"We have informed Bright Stars Nursery Group that the Council is open to
reviewing this position on application after a period of 12 months, subject to evidence of improvement of the aforementioned concerns."
Bright Stars are due to hold a meeting with parents this evening.
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