About 145,000 people with dementia are wrongly being prescribed powerful anti-psychotic medication which cause around 1,800 deaths a year, a Government-ordered review has found.

Only around 36,000 of the 180,000 people being given the drugs derive any benefit from them. The medication is known to be linked to deaths in 1 per cent of patients taking it.

The long-awaited review follows complaints from patients’ groups and MPs that the drugs are misused as a “chemical cosh” to suppress the anxiety and distress common in people with dementia.

Phil Hope, care services minister, promised to crack down on the practice and said that he would appoint a national clinical director for dementia who will conduct an audit of GPs’ and hospital doctors’ prescribing of the drugs. He also promised measures to ensure more use of psychological therapies and better training for staff and carers in recognising the reasons for anxiety, and how to prevent symptoms, rather than relying on drugs.

Anti-psychotic medicines are licensed for treating people with schizophrenia and are unofficially used for dementia patients in care homes and hospitals, or in some cases to help families to cope with relatives at home. Existing guidelines from the National Institute for Health and Clinical Excellence (Nice) say that the drugs should be used only when a person is a risk to themselves or others and where all other methods have been tried, and then only for three months.

In his review, Sube Banerjee, Professor of Mental Health and Ageing at the Institute of Psychiatry at King’s College London, said that the use of anti-psychotic drugs could be cut by two thirds. This could be done safely over three years. But ministers have not pledged extra funding, raising concerns about whether the recommendations will be adopted by the NHS.

About 700,000 people in Britain have dementia, of which Alzheimer’s is the most common kind. The number could double within 30 years as the population ages. Treating dementia costs £17 billion a year.

Mr Hope said that the routine prescribing of anti-psychotics was unacceptable. “More than half of people with dementia will experience agitation or aggression at some point, but Nice guidance is clear — anti-psychotics should only be given when this is really necessary,” he said. “We know there are situations where anti-psychotic drug use is necessary — we’re not calling for a ban, but we do want to see a significant reduction in use.”

The Government wants local targets for health authorities to reduce reliance on the treatments and to ensure that people with dementia and their carers have access to a variety of psychological therapies to tackle agitation or aggression.

Professor Banerjee said that patients in care homes may become distressed or angry because of “pain, depression, hunger, boredom or . . . not getting on with someone else”, but that could be addressed by “really simple things” such as proper care or more social interaction. His report estimates that the costs to local health authorities of improved care and training would be £68 million a year in England alone, but it estimates that £55 million could be saved by reduced prescribing of anti-psychotics.

Neil Hunt, chief executive of the Alzheimer’s Society, said that the review was a welcome recognition of the scale of the problem. The present over-prescription of the drugs and the resulting deaths was a scandal. He added: “There is a resources issue. Dementia care has not had enough money from the whole system. But the money that is there is not always being used effectively. There is a need for those who are providing care and regulating care to define what good practice looks like.”

Stephen O’Brien, a Conservative health spokesman, said ministers “should have taken action much sooner to alleviate the suffering of these vulnerable people”. He added: “People will ask how many lives could have been saved if Labour ministers had not delayed this report for over a year. The Government must act swiftly to implement the recommendations. Better training for staff and GPs, greater involvement of family members and more regular assessments of whether the drugs are appropriate are all key.”

Nadra Ahmed, chairman of the National Care Homes Association, said the blame did not lie solely with care homes and rejected claims that staff readily sedated sufferers as it made them easier to manage. It was often GPs who decided, she said.

In June the Scottish government launched a “Dementia Strategy” after a report said that the use of anti-psychotic drugs to control care home residents’ behaviour was widespread.

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