The most vulnerable newborn babies are being cared for by a service that is so acutely understaffed that less than 4% receive the level of care the government admits they require.

A survey of all 224 neonatal units in the UK reveals that on average they are understaffed by a third. An extra 2,500 neonatal nurses are needed to meet the levels of care set by the British Association of Perinatal Medicine, and endorsed by the Department of Health.

Fewer than one in 25 units meet these standards, the report by the University of Oxford's national perinatal epidemiology unit found. The nursing shortfall - which would cost an extra £75m a year to correct - means that over 77% of neonatal units had to refuse to accept premature babies, or mothers going into labour prematurely, during the six-month study last year.

The research, for premature baby charity Bliss, said each unit was shut to new admissions for an average of 24 days, and one in 10 units had to close for more than seven weeks during this period. But 65% of neonatal units providing the full range of intensive care services accepted babies despite not having enough staffed cots for those admitted.

Refusal to admit babies means many have to be transferred to hospitals outside their area; previous research shows they are transferred an average of 197 miles. Transfers can mean separation from their families - and a quarter of twins and triplets requiring treatment are also separated, an online questionnaire of 353 parents, also part of the report, found.

Capacity is so stretched that 1,233 babies were put on ventilators in special care units - known as level one - when they should have been in intensive care (level three). Lack of nurses comes despite the government investing £70m in neonatal services three years ago, although a third was not ringfenced and appears not to have been spent on this.