The ministerial committee for legislation rejected a bill this week that would have required every child-care facility with at least three children to be licensed by the Education Ministry, even though some 80 percent of children under the age of three are being cared for in unlicensed and unsupervised facilities.

The bill, which was initiated by the National Council for the Child and submitted by MK Michael Melchior (Labor), affects about a quarter of a million children.

It would require the education minister to decide on the criteria required to open and run a day-care center, including the training and background needed for whoever wants to run one, the approved ratio of children to caretakers and minimum safety and health conditions. The bill also gives the education minister the authority to revoke the licenses of those who don't meet the regulations.

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"The existing situation is absurd," said Yitzhak Kadman, director of the National Council for the Child. "Someone who wants to open a kiosk needs a license from the local authority. Someone who starts a 'business' to care for babies doesn't need a license."

The ministerial committee rejected the bill despite the support of Education Minister Yuli Tamir (Labor), who was abroad and unable to attend the meeting.

In addition, Prime Minister Ehud Olmert, who also has the social welfare portfolio, has spoken strongly about the current child-care situation and the need to fix it.

When Olmert served as industry and trade minister, he appointed a committee that set standards for child-care facilities and determined that licensing and supervision should be required.

The Industry, Trade and Labor Ministry began negotiations with the treasury over funds for a pilot program to implement the committee's recommendations.

However, the current industry and trade minister, Eli Yishai (Shas), opposes the bill, as does Finance Minister Abraham Hirchson (Kadima).

The Finance Ministry argues there is already a law from 1965 that sets licensing and supervision standards for various institutions.

The 1965 law relates to establishments including children's dormitories and institutions for the elderly or people with disabilities, but does not mention young children. And the law is not actually enforced.