Childcare has the potential to be the Achilles' heel in the upcoming Budget and this time Mr McCreevy is going to play it safe.

Under pressure from his fellow Cabinet Ministers to avoid another banana skin, he will steer away from giving tax relief on childcare expenses, despite demands from both the unions and employers. The bulk of money available will go to increasing the amount of child benefit.

Childcare is probably the only area where the community and voluntary pillar will get what it wants, despite stiff and sustained opposition from the other social partners.

The only question now seems to be the amount of additional child benefit the Minister will announce next Wednesday. Some observers believe it could be as high as £40 (€51) a month for third and subsequent children, with a smaller amount for first and second children. This would cost £301 million and would thus be the cornerstone of the Budget.

This would be described as the highest increase ever and enough to help child poverty and all women regardless of employment status. However, critics point out that it does not come close to the costs of minding pre-school children.

Childcare has been a thorny problem, with successive administrations keen not to favour women working outside the home over those working in the home. As a result, the issue has been punted about over the past three years with successive Budgets doing nothing other than taking measures to increase supply through capital grants for building creches and other such measures.

But the escalating cost of childcare - with many parents now paying as much as £200 a week - and the tight labour market, which needs more women to return to the workforce, means the Government can no longer put off the issue. The employers and unions have lobbied for a tax-based system that would help women who were paying for childcare outside the home. They argued that this would also help formalise childcare across the State and bring many operations out of the black economy.

It would mean, however, that women working in the home would not be able to avail of the payment. Up to last year, it looked as though this argument would hold sway eventually, even if Mr McCreevy failed to bite the bullet last year. However, the row over individualisation, which was seen to benefit dual-earning couples over single- income ones, put paid to that.

At a special pre-Budget Cabinet meeting a couple of weeks ago, Mr McCreevy's colleagues stressed he must take the safe option - none was prepared to countenance a repeat of last year's Budget furore.

As a result the only commitment Mr McCreevy will make at the moment is that "any future decision introduced in this year's Budget and Finance Bill will be taken in the context of the commitments made in the PPF". The one specific commitment in that programme is for child benefit to be raised to £100 for third and subsequent children and for a £400 million childcare package, over the next two Budgets.

The child benefit payment is seen as a child poverty measure rather than as a measure to help with childcare. However, there is some concern that Mr McCreevy will link child poverty with childcare in the Budget and thus use the £400 million to introduce an increase in child benefit.

According to Mr Brendan Butler, director of social policy at IBEC, this will "not only be a disincentive to work but could mean people leaving the workforce to work at home".

SIPTU says it would frown upon any attempt to renege on PPF commitments for childcare payments alongside child benefits payments.

All sides argue that their preferred option is pro-choice. Childcare 2000, which has argued for a universal childcare payments similar to child benefit, says not discriminating means women can choose to work either in or outside the home with no financial disincentive. This is preferable to an increase in child dependents' allowance, which is only payable under the social welfare system and thus suffers from disincentives, they say.

However, IBEC argues that no allowance in the taxation system acts as an incentive to stay at home, given the escalating costs of childcare.

One area that has begun to be targeted is the supply of childcare, although demand still exceeds supply and many parents simply cannot find suitable care for their children.

In last year's Budget, a £46 million package was announced, with almost half going to the equal opportunities childcare fund and £10 million to capital grants for upgrading facilities. Other far smaller amounts were allocated for local childcare networks, grants for schools to run after-school facilities and for community groups for after-school services.

It is likely that some of these will be expanded and after-school facilities may get a higher priority. It is also possible that designated space for childcare facilities could become a prerequisite for the granting of planning permission for new residential centres.

Another area the Government is considering is the elimination of benefit-in-kind where the employer provides money or vouchers towards childcare. However, there are concerns that this might be open to abuse. As a result, it may only be available for new childcare facilities.

It appears women's groups and the rest of the community and voluntary pillar will welcome the moves in next week's package. The employers and unions will not be happy but, as one privately admitted, he would probably do the same in Mr McCreevy's shoes.