Alistair Darling said this morning that the Government intended to reform the way that elderly and disabled people in England and Wales pay for long-term personal care.

The Chancellor of the Exchequer said that a forthcoming Green Paper would tackle the issue of how long-term care was funded, although he refused to confirm reports that means-testing would be abolished and every old or disabled person entitled to free care according to need.

In Scotland, where both Mr Darling and Gordon Brown live, long-term personal and nursing care has been free to everyone for several years, although recipients are still means-tested for meals and the 'hotel' element of living in a care home.

The free care that Scottish pensioners receive is worth up to £210 a week per person.

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The level of financial contribution made by the state and the individual will be the most contentious issue

Rosemary Bennett, Social Affairs Correspondent

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"I am not in a position to say that people's incomes are not going to be taken into account (in the way that some reports suggested this morning)," said Mr Darling.

"I'm not going to get myself into a position of making promises that we can't deliver on.

"I think we can make changes, I think we can make reforms, but I'm not going to sit here and say that somehow no-one's going to have to make any contribution (to the cost of their care) in the future."

He added: “I want to get to a situation where we can be as fair as possible.

“Most people recognise that there has to be a balance struck between what the Government can do and what individuals are asked to contribute.”

Mr Darling announced the Green Paper on long-term care in yesterday's Comprehensive Spending Review, saying that the aim was to ensure an "affordable" system was in place for the 21st century.

"These reforms will ensure that state resources are targeted effectively, and enable people to have choice and control over the ways they live their lives," the Department of Health added, in a press release.

According to the BBC, ministers are thought to prefer a system which couples universal entitlement with a top-up payment.

At present, nursing care and care-home costs are means-tested against the value of a person's assets, including their home. Only people with assets of less than £12,000 have their care wholly paid for by the state, and many elderly people have to sell their homes to pay for their care.

The Royal Commission on Long-Term Care, which reported in 1999, called for all personal social care to be made free to the patient - but little political action followed.

Earlier this year former bank chief Sir Derek Wanless published a report into the future of social care funding which called for sharp increases in funding to meet the demand for high quality care over the next two decades. He also called for the means-tested funding system to be scrapped.

The report found that if the system remains as it is, its costs will rise from £10.1bn in 2002 to £24bn by 2026 as a result of demographic changes alone.

Niall Dickson, King's Fund Chief Executive, said the system was much despised, and had caused distress and misery to older people and their families. He labelled it unsustainable, overly-complex and unfair.

He warned that the system was under-funded struggling financially, with local authorities raising their eligibility criteria and only focusing on those people with the most severe needs.

Mr Dickson said: "Our failure to support frail and vulnerable older people has been one of the unrecognised scandals of our time.

"There are more very old people than ever and yet fewer are receiving the social care support they need."

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