I agree with reggio. Don't use the line about only having full time space or,else,they may reply that they will do full time in order to guarantee,the spot,and,then you will be in a real pickle and have to find a different excuse.

I would tell them that you have chosen to go a different route or else tell then that "unfortunately I no longer have that spot available for you but thank you for your interest and I wish you well in your daycare,search. It was nice meeting you and your beautiful family"