That is the warning from top nursery chiefs from the area, as a funding policy that has seen a rise in intake has also led pre-schools to lose thousands of pounds in funding.
The 30-hours funding policy states that children of working parents are entitled to 30 hours of free childcare a week '“Â with the government subsidising the nurseries.
But nurseries say that this subsidy does not meet the amount that is lost, causing them to lose out onÂ income.
Nicole Atkinson, head of Rowner Family Centre in Gosport, says that there's a real danger of nurseries and pre-schools being forced to close as funds run dry.
She said: '˜The policy came in in September 2017 '“Â on the one hand, we've had an increase in children coming in, which is great, but it's coming at a huge cost.
'˜The reality is that nurseries are losing thousands of pounds; 84 closed in the autumn and spring terms '“Â it just isn't a sustainable way to operate.'
Currently, the government gives nurseries Â£4.34 per hour for each child.
But campaigners say that this is not enough '“Â costing out the hourly rate at Â£5.08 per hour.
Nicole said: '˜We're running at a loss of 74p an hour per child, and with 54 of our children signed up to the scheme, we're losing money fast.
Nicole joined more than 100 early years childcare organisations in London to lobby MPs about the funding levels.
Jenny Hadland, founder of tops Tops Day Nurseries, which has two centres in Portsmouth and one in Havant, says that private nurseries are facing an even bigger financial challenge.
She explained: '˜As a private nursery we also have to pay business rates as well '“Â nurseries within schools canÂ VAT and business rates back, but we're unable to do that.
'˜The only alternatives are to charge for top ups and consumables, or to restrict places to funded hours only '“Â but both of these discriminate against poorer families.
'˜It's a real problem and it was important to meet with MPs to promote the long term financial sustainability of childcare providers and high-quality early education.
'˜Early years education is the foundation for building a successful future for children, so has to be done right.'
But parents say that the policy has been a welcome helping hand to their child's development.
Kelly Nolan, 36 from Gosport, said: '˜The free childcare has been really great for my daughter because if we didn't get that she wouldn't be able to go to nursery.
'She's come on so much and things like her speech have come a really long way thanks to her nursery. I think it's a really important policy for parents.'
Nicole Atkinson says that the government must do more to support nurseries.
She said: '˜Funding at the moment is calculated from 2012 data, so it is horribly out-of-date '“Â they need to look at it again andÂ '‹'‹'‹'‹soon.'