Staff were told the setting would have to move out of the room it rents after Surrey County Council asked Byfleet Primary School to provide much-needed extra reception places there instead.
As a solution, Nursery World understands the school has told the setting it would be happy for them to build in the grounds, assuming the council grants planning permission.
There is another catch. The setting in question – King’s Pre-School in Byfleet – needs to raise £120,000 to fund the scheme.
A petition started by parent Carmen Aubry, describes the school's offer as a ‘glimmer of hope’.
It currently has around 1,100 signatures both online and on paper, supporting the plans and asking the council to contribute to the fund.
King’s currently offers provision to 72 children, including for three- and four-year olds in the school building, and for two- and three-year-olds from a football pavillion elsewhere in the village.
Ms Aubry, who has a three-year-old daughter Daniela (pictured) at King's, and a son Riley about to turn two and waiting to start, wrote, 'The school have been incredibly supportive and have offered to 
provide King’s Pre-School a plot of land within the school premises to build a new Pre-School accommodation which could house both pre-school classes and provide outside excellent recreational facilities for all the pre-school children.
'However, in order to build a permanent structure on this land they need planning permission ASAP and a substantial amount of money.'
Ms Aubry said manager Kerry McGuirk has already secured some of the funds, but campaigners are petitioning the council to match fund as a ‘goodwill gesture’.
Even a local supermarket has pledged a team to help clear the site of vegetation.
‘We will then work tirelessly to raise any remaining funds needed,’ adds the petition.
The petition states the on-site provision will close at the end of July if no other suitable premises can be found, meaning eight members of staff will lose their jobs and more than 25 children will be without a pre-school place.
King's is poised to submit a planning application to erect the modular buildings, and a community deputation is due to argue the case before a council committee tomorrow night (Wed).
'I don't think the council realised how much support we'd get, so it's caused quite a stir,' said Ms Aubry.
'We're on a time limit and need an answer by the end of July so we can be ready for September.
'We don't feel that pre-school children should be pushed out as they're just as entitled to an education. That's mirrored in the fact that the Government are saying they will extend to 30 hours [free entitlement].
'We're saying, "You have a responsibility, you do need to make sure the pre-school children have somewhere to go."'
King’s has operated from the school building for 13 years and provided care for children from the village as well as from surrounding areas.
The campaigner explained that because of the changes, the older group will move up to school in September, and the current younger group will remain in the pavillion, with little capacity to accept more children.
The setting would no longer be able to accommodate the 15 hours of funding for two-year-olds offered to low-income families.
Another 25 to 30 children on the waiting list will be turned away, including Ms Aubry's son, and many of the 20 children with special educational needs will experience upheaval.
The petition warns, ‘Other nurseries in the area are already almost full to their capacity so the chances of these children being left with nowhere to go at all is a real possibility.'
A council spokesman said, ‘There's huge pressure for all school places across Surrey.
‘We are having to find 11,000 in the next five years and are facing a funding shortfall of tens of millions of pounds to create these.
‘We have been in discussions with the school and they have agreed to take an additional reception class as we look to meet the increasing demand for school places in the county. ‘This has led to the school, themselves, choosing to close its class for three- to four-year-olds.'
Byfleet primary has not responded to requests for comment.