A Lambeth nursery school will close next month, after a row resulted in the council not renewing their lease.
Chestnut Nursery Schools clashed with Lambeth Council over a £150,000 council grant for maintenance to the council-owned premises.
The grant came as part of the lease agreement signed in 2013, which included a two-year rent holiday worth £100,000.
The council stated it reminded the provider that it needed to comply with the lease’s stipulations on multiple occasions.
A parents group is campaigning to save the nursery, which it contends is the only affordable childcare in Lambeth.
The group praised staff at the Corry Drive site for skilfully dealing with students from a range of backgrounds.
Chestnut Nursery Schools declined to comment on the allegation that they had not completed necessary repairs.
The nursery will close on 16 April while the council finds a new provider for the service.
Cllr Ed Davie, Cabinet Member for Children and Young People at Lambeth Council, said that the council will try to find an affordable childcare option for parents.
Davie said: “I’ve got no criticism of the manager or the staff who provide the nursery service within the premises who appear to do a good job.
“We are absolutely committed to providing a nursery service in that area, because we do need affordable nursery provision in that area.”
The parents’ campaign group has stated that the nursery is currently 15% cheaper than its nearest equivalent in the area.
Davie suggested this may be due to the money that the council has given them to undertake the uncompleted maintenance.
He said: “It’s easier to make things affordable when you have a quarter of a million pounds of taxpayers’ money meant for a specific purpose and you’ve not done the work.”
The Labour councillor also said there will be a legal process between the council and the company over the dispute.
A council survey found that the site was in a poor condition but not immediately dangerous after minor adjustments.
Despite a lease extension to keep the nursery open until summer, Chestnut has declined to continue providing the service.
The Save Corry Drive campaign group has also hit out at the council for poor communication over the nursery’s fate.
Sarah Young, a parent involved with the campaign, said that the potential closure was announced on 5 March.
Young confirmed there were no consultations with parents during the decision-making process.
She added that parents had no idea about the row over maintenance between the council and Chestnut Nursery Schools.
Young said: “Everyone is just in shock and they’re feeling very very angry at the way this has been handled.
“We are doing everything we can to try and save it.”
Helen Hayes, MP for Dulwich and West Norwood, has responded to the planned closure.
Hayes said: “Chestnut Nursery is a cherished local nursery, and I was extremely concerned to hear about the risk of closure.
“I will continue to work with parents and the Council to ensure affordable, high quality nursery provision at Chestnut for the long term, which is much needed.”