STAFF are urging the council to reinstate their funding after being given an 'Inadequate' rating by the schools watchdog.
The Elms Montessori School and Day Nursery faces the threat of closure after it was told it was no longer suitable for an early years education grant.
The Earley preschool, led by manager Tina Luthra, wants Wokingham Borough Council to give them more time to help reassure parents.
Some families who send their children to Elms Montessori School depend on the subsidy for up to 30 hours per week of childcare.
Ms Luthra says she has been given 'the cold shoulder' every time she has attempted to ask the council for a u-turn.
She said: "We have hugely supportive parents and some don't even care about the funding but it is important for other families.
"I have done everything I possibly can. I can only hope the council will reinstate the funding.
"If children leave and there is no sustainability, then there is a risk of closure. I don't want to, but if it comes to the point where I can't pay staff then what other choice do I have.
"They [the council] have been very cold-hearted about it. It is their duty to support us."
It is thought 40 children could be affected by the funding cut, which previously granted funding for children aged two to four.
Ofsted inspectors carried out a visit in July and raised concerns about safeguarding, recruitment and inconsistent teaching.
Ms Luthra says she and her staff have worked hard to address the report, but the future of the early years provider is now at risk.
Councillor Pauline Helliar-Symons, executive member for Children’s Services, added: "We are committed to providing the best possible start in life for our youngest residents.
"With this in mind, 98 per cent of our early years providers are currently rated Good or Outstanding by Ofsted.
"We administer early education funding in line with government guidelines to ensure children access good quality provision.
"Following inspection back in July, Elm’s Montessori was deemed Inadequate by Ofsted, and reinspection this month remained Inadequate.
"In accordance with Department for Education guidance, this leaves the nursery no longer eligible for an early years education grant.
"They will be able to claim funding again if they achieve an improved Ofsted rating."
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