Mothers should receive much more financial help to stay at home and care for their babies, according to a new report expected to influence Tory policy.

The study, from a think tank favoured by David Cameron, the Tory leader, warns that too many women who want to be stay-at-home mothers are being forced back to work by financial pressures while their children are still very young.

It calls for radical changes to the tax and benefits system to enable parents to remain at home in the first three years of a child’s life if they wish to do so. The changes proposed could be worth more than £500 a month to women who choose to stay at home.

The recommendation is based on “compelling” research in psychology and neuro-science that suggests the bond between mother and baby in the early years is crucial to a child’s future development.

The research shows that the foundations for emotional well-being, kindness, empathy and concern are very immature at birth. How they develop is dramatically affected by an infant’s bond with its parent.

Iain Duncan Smith, the former Tory leader who led the report, believes parents who fail to form a close and loving relationship with their babies risk “sowing the seeds of later unhappiness” in their children.

“We need to level the financial playing field for parents. Society is paying a high price for the quick fix of getting mothers back to work so soon after birth,” Duncan Smith said. “We need a fairer system in which the financial sacrifice of giving up work to look after a baby is offset by extra help from the tax and benefits system.”

The findings will be considered closely by Cameron, who is determined to put families at the heart of Conservative party policy. It represents a direct challenge to Labour policy on parenting and childcare, which is geared towards helping mothers back to work.

The Next Generation report, compiled by a panel of psychologists, educationists, and child health specialists for the Centre for Social Justice, argues that levels of statutory maternity pay and child benefit are not nearly sufficient to give mothers choice over when to return to work. It draws on opinion polls showing that 88% of parents think more should be done to help those who wish to stay at home and bring up their children when they are babies and toddlers. Among them is Clare Spillman, 42, an occupational therapist for the NHS, who was forced to go back to work sooner than she wanted after the births of her children Esmee, 5, and Theo, 14 months.

“I was really organised and saved money to set aside so that I could take time off,” Spillman said. “But I still had no choice but to go back to work. My sister lives in France and there mums stay off work for three years and she was able to go back to her former job.”

The most dramatic measure proposed by the report is a “front-loading” of child benefit, giving parents the option of having more of the total entitlement in the early years of their child’s life. At current rates, if parents were allowed to take it all in the first three years, they would receive about £6,000 a year.

Spillman, who lives in Hackney, east London, with her husband Daniel, a senior manager with Islington council, believes such a measure would have a significant impact. “Front-loading child benefit for the early years would probably have been a big help,” she said.

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