UK dairy companies are urging the government not to benchmark a price cap on nursery school milk against supermarket prices.

The Department of Health consulted on a number of options on the future of the Nursery Milk Scheme last year. Dairy UK favoured the introduction of a cap on the price paid to childcare providers, above other options.

As the government prepares a consultation response on the future of the scheme, 94 dairies this week sent an open letter to the DH and Defra pressing them to implement any cap at a sensible and realistic level to account for administration costs, such as delivery and packaging.

Using supermarket prices would be wholly inappropriate and “would ultimately cause harm to the dairy industry and reduce the number of children receiving milk,” said John Gregory, manager at Rock Farm Dairy, one of the companies behind the letter.

The scheme - which has been running since the 1940s, provides free milk to 1.5 million under-fives.