CHILDREN'S hospices will avoid having to cut services after a £27m funding package was announced by the Government yesterday.

But hospice supporters warned the Prime Minister that the three-year deal was a short-term fix and permanent improvements were needed in statutory funding.

Representatives of the children's hospice movement, who met Tony Blair ten days ago to discuss their funding needs, said the cash was a vote of confidence in the sector.

Barbara Gelb, chief executive of the Association of Children's Hospices (ACH), said: "This announcement is a significant step forward in the Government's acknowledgement of the need for services to children who are going to die in childhood, and their families.

"We asked the Prime Minister for a short-term cash injection and he has delivered. We are absolutely delighted."

Ms Gelb said the money would save England's 28 children's hospices from having to cut services in the short term, and could enable them to help more children, as well as developing new partnerships with local health and social services departments.

Mark Guidery, manager of Zoe's Place children's hospice, in Normanby, Middlesbrough, said he did not know whether the cash would be made available to all.

Zoe's Place is not a member of the ACH. It has had trouble securing National Lottery cash in the past because it offers care to children only up to the age of four.

Mr Guidery said: "If it's for all children's hospices, then it's fantastic news. But if it's only for members of certain associations, we could be excluded.

"Lottery funding runs out in September, so places like us and the Butterwick will be facing a severe shortfall.

"If we are all getting a share of this money, it will be brilliant."

The news was welcomed by Stockton South MP Dari Taylor, who has campaigned for more Government funding on behalf of the Butterwick Children's Hospice, in Stockton.

The Northern Echo led a campaign to build the North-East's first children's hospice, in memory of Princess Diana, and raised £500,000.

Mrs Taylor said: "This is long overdue, and a welcome start.

"The pressure has been on the minister for some time.

"What the Government was giving to children's hospices previously was a maximum of five per cent of their annual costs. What we've been asking for is 35 per cent, the same as adult hospices.

"The fundraising that these places do on a daily and weekly basis is phenomenal, and the work that they do is critical.

"This is a very important piece of news for me to look at, to see how the money will be spent. It sounds a lot of money, but by the time it is shared out it is not going to be great deal. But it is a welcome start."

Nobody was available for comment at the Butterwick Hospice yesterday.

Health Secretary Patricia Hewitt said that the money would allow organisations in England to expand their delivery of palliative care, both at home and in hospices.

Almost 15,000 children aged up to 19 died between 2000 and 2004 in England, and 25 per cent of them needed palliative care to relieve pain and distress from conditions including cancer, muscular dystrophy, cystic fibrosis and severe cerebral palsy.