The Liberal Democrats have highlighted the party's pledge to scrap the government's child trust funds scheme and invest the money into early years education instead.

Leader Charles Kennedy and education spokesman Phil Willis were visiting an early years centre in the London borough of Islington on Thursday, where the Lib Dems are in control of the local council.

They made the case for diverting the cash going into the chancellor's £1 billion child trust fund scheme directly into nursery and primary schools, rather than giving it to parents to invest for their children.

The move comes in the week Gordon Brown officially launched the scheme aimed at providing all adults with a significant financial asset at the age of 18.

Under the scheme the government will give all children born after September 2002 a lump sum of £250, rising to £500 for those from the poorest families.

Parents can then choose a range of tax-free savings options for the money, with friends and family able to top up the account up to a maximum of £1,200 per year.

The cash cannot then be accessed until the child turns 18, when it is hoped the money will be put towards a first foot on the property ladder, starting up a business or accessing higher education.

But the Lib Dems claim investment in pre-school and early years education would provide a better return for society.

"If we are serious about putting our children first if we are serious about improving nursery and early years education, if we are serious about investing in the fantastic work of early years centres then we must be prepared to make tough choices when it comes to the allocation of government funds," Kennedy said.

"Tough choices mean looking carefully at the money being spent on our children and choosing to spend it more effectively, rather than wasting it. As a society, Britain cannot afford to postpone investing in our children. That is why my party is strongly opposed to the child trust fund scheme launched by the government on Tuesday.

"The government is set to spend around one quarter of a billion pounds of taxpayer's money every year in support of this scheme.  Superficially it may sound attractive but ask yourself what would you have done if you had been handed £500 by the state at the age of 18? Would you consider this to be a good use of taxpayer's money?

"For those who choose to go to university it is a particularly hollow gesture as the government will give them a few hundred pounds in cash and at the same time a mortgage-style bill in tuition fees.

"We believe that it would be more farsighted to spend the billion pounds or more which is set aside in the child trust fund to reduce class sizes to 20 for five to seven year olds, than giving 18 year olds a bit of cash."