If you Google for Singing Kettle, you'll find some Scottish folk-style children's song selections, including CDs with some respected singers (Cilla Fisher, Artie Trezise).

I can remember in the 1970s when Listen with Mother included the singing of Peta Webb and Alison MacMorland, but I doubt whether there are any existing recordings of that.

And then there are the Bagpuss songs - not exactly nursery rhymes, but often tradtional-based, and charmingly sung by Sandra Kerr and others.

You're right, it's worth making an effort to get away from the affected pop-style that pervades so many recordings now. Children respond to folk music very intuitively, it doesn't have to be "funky" and over-orchestrated.

Marje