It is in reaction to an ongoing review by the LSE into the nursery, which it says is 'under-used' and running at a loss. Currently just 20 children attend the 63-place setting.
While the LSE claims it has no intention of closing the setting and has committed to keeping it running until the end of the lease in 2020, it is looking at the best ways to provide appropriate childcare support to students and staff.
However, amid concerns that the future of the nursery is in doubt, the university's students' union - LSESU - has started a campaign in which it is calling for the school to re-invest in the nursery, as it believes it would encourage greater take-up of places among parents.
As part of the campaign a petition has been launched, which so far has 900 signatures. Students and staff also took part in a day of action on Monday, gathering outside the LSE's management offices for a picnic.
It is the second time in five years, students and staff have launched a campaign to protect the nursery. In 2010, the LSE considered closing the setting because it was running at a loss. As a result of the campaign the nursery was moved from its former premises, a church hall, to its current site - the basement of a LSE building.
However, according to a survey by the LSESU, the nursery premises is the reason many parents are put off sending their children there. The setting has no outdoor space or natural light. The student's union also says it is in a state of disrepair.
To combat this, it wants the LSE to renovate the nursery within the next year, relocate it to another site by 2020 when the campus is due to be redeveloped, and consider subsidising nursery places for students. It believes the move will help make the nursery as popular as it was when it was ran from the parish hall.
Campaigner and student Kat Hymas said, ‘Our survey found that there is demand for childcare, despite what the LSE says, the issue is the quality of the nursery.
'The nursery is a valuable resource, however LSE are very unclear about what is going to happen to it after 2020.'
A LSE spokesperson said, 'LSE is committed to providing appropriate early years childcare support to staff and students. However, consideration needs to go into the best ways to do this and to ensure resources are used effectively.
'We have already conducted several surveys of staff and students and plan to continue to do this.
'Although the nursery has run at a deficit for many years, this is not a central issue of concern. The school would not expect such a facility to generate a surplus and there is no intention to require the existing nursery to operate on a commercial basis.'