Here you go, this is pretty much the gist (it changes a bit according to how quick I want to make it or what I can remember. It's pretty basic and sledgehammery but dd was just over 3 when I first told it to her):
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Once upon a time there was a little girl/mermaid called Melody. Melody loved playing with her best friend Lucy at school - they did everything together! On Monday they had so much fun, painting pictures of fishes with rainbow scales, then they dug for worms in the mud outside - Melody found a tiny wriggly one and Lucy found a big fat one.
On Tuesday, Melody went to play dressing up with Lucy, but NO 'I'm playing with Aisha today' said Lucy. 'Oh!' said Melody 'but... who will I play with?' and she went to sit in the book corner. She was miserable. Ms Redman saw her, and asked why she was so sad. 'Well, Lucy wants to play with Aisha today and not me'. 'Oh' said Ms Redman, 'that's ok. Why don't you try playing with someone else? It's fun to see what different games you can play'.
So Melody played with Jordan, and they pretended to climb into a rocket... 5-4-3-2-1 blast-off! And they visited a planet where everybody said lalalalalalala.
'Did you have fun with Lucy today?' said Mum when she came to pick her up. 'I didn't play with Lucy,' smiled Melody, 'I played with Jordan and it was SO MUCH FUN.'
On Wednesday, Melody played with Roman and Ruby and they made dinner out of playdough.
On Thursday, Melody and Jacinta did writing in the writing corner.
On Friday, Melody, Ruby and Jordan were playing chase outside. 'Can I play?' said Lucy. 'Yes, of course!' they all said. So they all played together and Melody learnt it's great to play with everybody at nursery because everybody has different games.
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NB: most stories are about mermaids or princesses by request. It has absolutely nothing to do with the story!