Ok, I will stick my head out.

Island: Tenerife.

More for the children, theme parks, water parks etc.

Resort: Playa De Las Americas.

Plenty of beaches, more in the evening for all ages.

The spanish love catering for Children so you will fit right in.

Hotel: Sorry, cannot help you.

Thank you, I will have a little look to see if any hotels / flights will come within the budget!!

check out iberostar bouganville playa... or iberostar las dalias

http://www.iberostar.com/iberostar.asp?conccodi=102&codiconc=STFE&cb=3&adwords=general&ls=1&idiocodi=2&gclid=CMPF74XvkagCFYEc4QodrBLSCw&fechaini=11/04/2011&fechafin=16/04/2011&adultohab0=2&ninohab0=0&bebehab0=0&numerohabitaciones=1&edadpersona0_0=30&edadpersona0_1=30&numeropersonas0=2

both in great locations..... and kid friendly

nice hotels too !!!

If thats is your budget in total (for the 2 families ), I would think that it will be nigh on impossible to get you a decent all inclusive . DIY would probably be just as expensive as flight only seats will be dear as that is school break up weekend , Tenerife does nt have many all inclusives anyway , F'ventura does have more and I think that would be a better bet as a family destination (only my opinion !) , Corralejo nice and Costa Caleta

You need to up your budget to at least £6000 and you will have a better chance and if you are lucky you might get a couple of free child places with a tour op what will cut you costs down, if you are planning to go away next year the holidays will be going on sale soon for 2012 and its the best time to book because you get those free child places what cuts your cost down.

Bouganville playa is a nice hotel but when you come out of the pool the sea breeze hits you and its like walking into a air conditioned room after having a shower. The sea is cold and the beaches are not the best and if I was you I would take a look at at majorca, excellent white sand beaches in 99% of the resorts and sea temps getting upto 82f in august.

I like tenerife but with young children majorca would be a better bet if you plan to spend time on the beach because the beaches are very safe with lovely sand and the sea is warm and, there are so many resorts to choose from but I would say A/I hotels are probably better in tenerife but with everything there are good A/I hotels and bad A/I hotels where ever you go so check out the reviews.