Tynwald has rejected a special motion to defer the end of state pre-school and nursery provision by 12 months to September 2013.
Garff MHK Steve Rodan put it forward, saying there were too many questions about the proposal which still needed to be answered.
The motion also called for the retention of the Mobile Library and Family Library, which was voted for separately and rejected too.
Support for Mr Rodan during the debate came from backbenchers Howard Quayle, Alf Cannan, Richard Ronan, Brenda Cannell and Leonard Singer among others.
Arguments against the plan predominantly came from chief minister Allan Bell and the rest of the Council of Ministers.
After almost three hours of debate both chambers of the Manx parliament voted against Mr Rodan's motion: