The New Zealand Childcare Association (NZCA) says a report released by lobby group Family First branding daycare harmful is negative and biased.
The report says extended childcare is causing stress for many young children, which could have long-term consequences for their mental and physical health as adults.
Prepared by British-based American psychologist Aric Sigman, the report says studies had shown increasing levels of the stress hormone cortisol among 70 to 80 per cent of toddlers in daycare.
Nancy Bell, chief executive of NZCA, which represents about 600 childcare centres, says the research's conclusions seem to be ideologically driven.
"We think it's a very negative view of early childcare education or daycare as they're calling it."
Despite this, Ms Bell says attending childcare can cause stress for young children.
"The younger you are the less likely you are able to manage your own stress levels," she says.
"You really do rely on having very sensitive adults and caregivers that understand your needs."
Ms Bell says there is no one answer to the choice between putting a child in childcare or staying home to look after them.
"It's hard to answer that in a global way because for some families the best answer is going to be staying at home with mum... and for some families that's going to put them under enormous economic pressure and mum might not be entirely responsive in the ways that we might dream of."
Family First national director Bob McCoskrie said there had been too much policy focus on the needs of the economy and the demands on mothers rather than the welfare of children.
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