Parents have said they face paying out thousands of pounds in extra childcare costs after BMW Mini decided to close a nursery for children of staff.

About 30 families use the nursery, which has been running on land adjoining the BMW site, in Cowley, Oxford, for the past 14 years.

The car manufacturer has told parents that the Mini Kids nursery, next to the social club in Roman Way, is going to close because demand is decreasing and it is no longer sustainable.

However, parents said there is a waiting list of parents eager to place children with the nursery, and said they may have to pay £2,000 a year more to buy day-care for their children.

Mother-of-two Stacey Rohling, 31, of Burchester Avenue, Barton, Oxford, whose 16-month-old son Max attends the nursery, said: "A lot of parents are really angry about this and the issue is not going to go away.

"We worked it out and it's probably going to cost about £2,000 a year to move Max to another nursery. It's going to be absolutely awful."

Ms Rohling said she paid £120 a week for Max's stay at the BMW nursery.

Eight out of 28 spaces at the nursery are taken by children whose parents do not work at the car plant, and they have to pay about £160 per week, she said.

She said parents had received a letter on Friday saying the nursery was going to close, partly because BMW was not happy with the Ofsted report the nursery received last July.

But she said improvements had been made, and parents had had a meeting with human resources manager Mike Edwards to protest against the decision.

One father, whose two children attend the nursery, added: "The nursery is one of the main fringe benefits for BMW staff.

"BMW say the nursery is running below capacity although we believe there is actually an external waiting list."

Paul Morgan, 32, from Bicester, who has worked at BMW for the past 15 years, said: "My daughter Hannah is nearly two and it will be upsetting for her to move to a new nursery. This decision could cost me about £200 a month.

"The staff at the nursery are perfect and I do not see why it has to close down."

In a joint statement, Busy Bees, which runs the nursery, and BMW spokesman Rebecca Baxter, said: "The decision to close the nursery has been an extremely difficult one but a decrease in demand over the past few years has meant that the nursery is no longer sustainable.

"The nursery opened 14 years ago at a time when there was no provision in the immediate area. Today, there are 20 other providers locally.

"We understand the parents' disappointment but efforts will be made to find alternative childcare provision, and Busy Bees will be helping its loyal and dedicated staff to source alternative employment."

BMW said occupancy at the nursery was just over 60 per cent in the past few years.