Jakarta – Tough economic conditions and a dysfunctional government policy of giving no-strings funding to orphanages are forcing more poor Indonesians to give up their children, a charity said Thursday.

Only six percent of an estimated 250,000 to 500,000 children living in Indonesia's care institutions are genuine orphans, Florence Martin from Save the Children told AFP.

A combination of persistent poverty and a government policy granting 3,000 rupiah (32 cents) per child per day to orphanages meant the number of institutions had more than doubled over the past decade, Martin said.

"If families are increasingly facing vulnerability in terms of coping daily... and on the other hand we have institutions that are receiving more (government) assistance than the families daily, then we have a kind of push and pull factor," she said.

This dynamic means that although many of Indonesia's estimated 5,000-8,000 orphanages were started with good intentions, "in the end they do become a kind of business," she said "These children really shouldn't be there."

A report released Wednesday by Save the Children, UNICEF and Indonesia's social affairs ministry found a lack of government knowledge and unconditional grants were contributing to the growth of care institutions.

The report recommended better government oversight of orphanages as well as more direct government support for poor families to deter them from giving up their children.