The government has insisted it is not withdrawing all funding for a charity that gives free books to children, after criticism from top writers.
The education department is in talks with Booktrust to make savings on the £13m given this year toward the charity's operations in England.
A joint statement said they aimed to better support the poorest families.
Writers including Philip Pullman had reacted angrily when it was suggested the charity may be unable to continue.
Children's writer Mr Pullman said that would be an "unforgivable disgrace", while ex-poet laureate Sir Andrew Motion warned of "an act of gross cultural vandalism".
Mr Pullman described the charity's work as "one of the most imaginative and generous schemes ever conceived".
He told the Observer: "To put a gift of books into the hands of newborn children and their parents is to help open the door into the great treasury of reading, which is the inheritance of every one of us, and the only road to improvement and development and intellectual delight in every field of life."
The charity provides packs of books to parents when their babies are first born and again at later stages in their development.
The project started in 1992 and has received money from the government since 2004.
It is funded separately by the devolved administrations in Scotland, Wales and Northern Ireland.
'Every possible saving'
Booktrust chief executive Viv Bird said a letter had arrived from the Department for Education (DfE) a week ago saying that 100% of its government funding would be cut.
But she told BBC News that, in a conversation on Sunday morning, Education Secretary Michael Gove had "committed his support for Booktrust book-gifting programmes so that every child will continue to have access to the gift of a book".
She said that the charity would hold talks with the government in the new year about the level of continued public funding.
A joint statement from the DfE and Booktrust said the department would "continue to fund Booktrust book-gifting programmes in the future".
It said: "Although the current contract will end in April the department are talking to Booktrust about how to develop a new programme which will ensure that every child can enjoy the gift of books at crucial moments in their lives while ensuring we develop an even more effective way of supporting the most disadvantaged families to read together."
The book-gifting schemes have previously been universal, including families that can afford to buy books, because the charity says targeted programmes struggle to reach all families most in need.
Booktrust says that, through support by publishing companies, it has been able to generate another £4 for every £1 of government money.
Charity co-founder Wendy Cooling was made an MBE in 2008 for services to children's literacy.
http://www.bbc.co.uk/news/education-12079784
