During the cold, wet and snowy weather of last February, politicians were left in little doubt that childcare would be one of the major issues for the next general election. During that month, senior politicians from all parties made their way to Meath and North Kildare to canvass for the by-elections, writes Liam Reid, political reporter

As they trudged through vast new housing estates, they came across parents who were dropping their children off in creches before 7am, who would not see them again for another 12 hours, and who were paying up to €1,300 per month in childcare for two children. Many had recently arrived into the area and did not have the family networks that have been the backbone of traditional childcare in Ireland.

Some politicians, including the Taoiseach Bertie Ahern, have subsequently said that it didn't take a visit to north Kildare to realise that childcare was a major issue, but it is beyond doubt that it focused minds in Leinster House.

As childcare costs and the number of families with both parents working have mushroomed in the past eight years, the growing problem had gone largely unaddressed by political parties until the past 12 months, when the issue has reached almost crisis point.

Indeed Leinster House, which is dominated by middle-class, middle-aged males, most of whom are personally unaffected by the issue, is a case in point of the general tardy approach to the issue. It has taken five years of talks and discussions for a creche to be provided there.

Resolving the childcare issue might well be a social imperative, but the residents of Leinster House know that it could lose or win them the next election. Constituencies with large urban populations will be key battlegrounds in the May 2007 election. They also know that the swing voters in these constituencies are most likely to be young parents in good jobs who have few political ties or allegiances in the area.

It is the main reason the Government will be unveiling a major package of measures on childcare next month in the Budget, while each opposition party is in the process of drawing up, or has already published, comprehensive proposals on the area.

The parties, and indeed the Government, know that simply throwing money at childcare will not solve the issue, and detailed workable proposals that stand up to scrutiny will be vital if new voters are to be attracted. They know that voters will not believe a plan that promises a Scandinavian childcare Utopia within two years.

Addressing the issues is a delicate political balancing act, where there is an inherent risk of alienating more people than you please. The danger is producing a package that benefits one group, such as families with two working parents, at the expense of those who stay at home to mind children. Parties also have to be wary of designing a package that helps only middle-class parents and forgets those on lower incomes.

Before the by-election, it was by no means certain that the Government was planning a major childcare package, with some Ministers advocating that they hold off until six months before the 2007 general election to maximise its electoral impact. This plan has now been abandoned and since early summer Ministers and a team of civil servants and experts have been working to draw up a new childcare package.

The Government's current policy is a key example of a political desire not to alienate any group. Five years ago the Government decided that the best way of supporting parents was to increase child benefit. It has led to a system where parents receive more than €140 per child per month, tax free and regardless of wealth, at a cost of €2 billion per year to the Exchequer.

Tax breaks and a €300 million investment programme in childcare facilities have led to modest increases in places. Overall, the current measures are entirely inadequate, and although they will not admit it publicly, Government Ministers know this.

After the by-elections, the Taoiseach Bertie Ahern drafted in the Minister of State with responsibility for children, Brian Lenihan, to head the review. The draft report was presented to the Cabinet sub-committee on children, which includes both the Taoiseach and Tánaiste, at the end of July.

It did confirm what the politicians knew: the problem of childcare was most acute in the emerging commuter belt around Dublin and other Irish cities. It also found that the most acute crisis related to those under five, whose parents were most dependent on full-time childcare. It again re-examined a series of new proposals, such as increased child benefit and tax allowances, which had been looked at for last year's budget by the Government's tax advisory group. Again, most of these were found to have significant drawbacks.

Much has been made of the idea of tax breaks for working parents to help pay for childcare, but this approach might simply benefit wealthier parents, and it does not provide help to parents who decide to stay at home to mind their children. Nor does it address the issue that because of the current lack of supply, many parents use "informal" childcare arrangements where children are cared for in other people's homes. It is a sector that is effectively in the black economy, but one the Government will be loath to address, as it is currently acting as a safety valve because of the lack of registered minders and childcare places.

Ultimately, it is impossible to predict exactly what Brian Cowen will announce in next month's Budget, although there have been hints. Speaking at the Árd Fheis last month, the Minister for Education Mary Hanafin said the package would be "not just for those in the workplace, but also for those in the home", an indication that universal measures, such as paid parental leave and child benefit, is currently being favoured.

Brian Lenihan and his civil servants at the National Children's Office have also drawn up a detailed strategy, on foot of an internal report on childcare by Indecon Consultants, and submitted it to the Cabinet sub-committee and the Department of Finance. Again there is a series of proposals, from financial and tax supports for creches and childcare services, to tax credits and the development of a comprehensive pre-school system. None are guaranteed to make it into the final proposals to be outlined next month.

Some Ministers privately believe the proposals are likely to target under-fives, with an increase in paid parental leave seen as a possibility. It is expected the Government will be keen to introduce measures aimed at lower-income families, a continuation of the "Inchydoney" agenda of social inclusion. It is also believed that the package will not relate to one year alone, but will outline plans which will take effect over a period of time.

Within Government, there is still a political concern that introducing such a large package well in advance of the general election will damage its electoral chances, by leading to an auction where opposition parties would simply be able to "outbid" the Government with offers of even greater help to parents.

Series concluded