embattled Nambour Day Nursery will close.

The Paget nursery has been rocked by controversy for months over treatment of children there.

Yesterday owners Mr. David and Lydia Oliveira revealed they would retire on August 31.

But they coupled the announcement with a blistering broadside against Independent MP Stuart Hayward.

They slammed him for making "unwarranted, unnecessary and unfounded'' comments about the nursery.

And they claimed they were forced to retire by rumours and allegations which had wrecked their reputations.

"We have asked our lawyers to advise on any and all legal actions available to us for the damage and injury we have been caused.'' Government is now awaiting an application from proposed operators of a new child care programme at the premises.

They will have to be carefully vetted, said Government's chief medical officer Dr. John Cann.

And he could not guarantee children at Nambour would not face disruption.

He added, however: "It is not a lengthy process for the application to be considered.

"We have received a verbal request and an indication from people wanting to set up a programme, but have nothing in writing yet.'' Dr. Cann believed there would be a "whole different set up'' under new operators.

This would include different staff running it. And the nursery would have another name.

Dr. Cann understood children at Nambour would be given preference to join the new programme.

Earlier this year Police and social workers launched a probe following allegations of misconduct.

Some parents removed their children.

Yesterday Independent MP Stuart Hayward triggered fierce controversy by announcing a nursery would be closing.

He was careful, however, not to name the nursery.

Mr. Hayward claimed Police last week quizzed staff at the nursery.

"There are rumours that the principals at the nursery are planning to leave Bermuda.'' Mr. Hayward went on to call for Government to tighten up legislation regulating Bermuda's nurseries and day care.

And he called for: Compulsory reporting of suspected misconduct; Proper collection and availability of statistics on abuse; Professional help for Police in dealing with sensitive prosecutions; Training and proficiency standards for all day care workers; and Licensing and monitoring of all day care facilities.

Mr. Hayward said it was his duty as a Parliamentarian to raise issues of suspected misconduct.

"My main thrust is prevention,'' he said, adding he had scrupulously avoided mentioning names.

Mr. Hayward said he believed child abuse was "epidemic'' in the Island.

Yesterday Nambour's owners released a statement through lawyers Appleby, Spurling & Kempe.

It began: "It is with dismay, anger and regret that the owners of Nambour Nursery feel compelled to make the following statement in response to the unwarranted, unnecessary and unfounded comments of MP Stuart Hayward; comments which we believe were made for obvious and transparent political purposes.

"We can confirm that we have decided to retire and parents were this week informed by letter of our decision to retire effective 31st August.

"These are not circumstances under which we wished or wanted or ever intended to retire.

"However, it has been increasingly and painfully obvious to us that we had no choice.

"Our school has been the target of rumours and allegations, all of which have been and are vigorously denied.

"What is worse and most despicable is that they have been perpetrated if not with the goal then the effect of irreparably damaging and destroying our reputation and, more importantly, our ability to continue the function as a nursery and day care.'' The statement says an agreement had been reached for new owners to provide at nursery and day care at the premises.

"It is our intention, as a matter of interest, to retire here in Bermuda and not in the United States as Mr. Hayward seems to think.'' The couple continued by calling for the support of "those who truly know us''.

Last night Health & Social Services Minister the Hon. Quinton Edness could not be reached for comment.