Nearly 2.5 million Child Trust Funds (CTFs) have been opened since the Government started the savings scheme almost two years ago but despite an expensive advertising campaign one in four parents were not involved in the process.

The Government introduced CTFs in April 2005 as a way of encouraging a savings culture. The parents of every child born after September 1, 2002 has received a CTF voucher worth £250.

But the official figures released today showed that only 74 pert cent of parents chose where to invest their children’s money with the remaining 530,000 parents relying on the Revenue to allocate the cash for them.

CTFs allow parents, family and friends are entitled to top up savings by up to £1,200 a year. Children from lower income families receive an extra payment of £250 into their accounts.

The Government makes a further contribution of £250 into all CTF accounts at the age of seven, with poorer children again getting an additional £250 voucher.

Vince Cable MP, treasury spokesman for the Liberal Democrats, said: "These latest figures show the failure of the scheme to interest the people it is most designed to help. While the trust fund is well intentioned, the substantial amounts of Government money involved would be better used for other purposes, particularly education."

But Ed Balls, Economic Secretary to the Treasury, defended the scheme. He said: "It is really encouraging that three in four parents are now opening accounts for their children, but we want to do more.

"We want parents, grandparents and whole families to use the Child Trust Fund and we are asking schools to start using the accounts to teach kids about money and savings."

The Liberal Democrats say the scheme is flawed because there is is nothing to stop children spending the money on a cheap holiday when they’re 18.

"It is high time that this scheme was scrapped," Dr Cable said. "We need the money to be spent on young people now, not be locked away for 18 years," he added.

An inaugural Child Trust Fund Week will take place later this month (from January 15 to January 20) to increase awareness about the saving scheme.