The ratings, ranging from 4-star for excellent to 1-star for poor, will be awarded according to the calibre of care given as well as the quality and condition of equipment and accommodation.

The measure aims to raise standards for about 500,000 adults living in 20,000 care homes, which generally charge between £21,000 and £42,000 a year for a place.

Currently care homes have to meet minimum standards, but there is no way of telling if a home has passed with flying colours or just scraped through. There is, therefore, little incentive for homes to improve their standards above the basic level.

The new system, to be introduced by the Commission for Social Care Inspection, will give those paying for long-term care, including local authorities, an idea as to whether they are getting good value for money.

Dame Denise Platt, the chair of the commission, said that there was currently no clear link between the fees charged and the quality achieved.

“People can read our reports about individual homes, but until now there has been no way to make direct comparisons between homes. We hope that the new system will bring quality closer to price,” she said.

The adult care home sector in Britain is worth £12 billion a year and employs one million people, but it remains a mystery to many people forced, usually at a time of crisis in their personal lives, to find accommodation.

At present, those seeking a care home for themselves or a relative are handed a list by their local council containing the names and addresses of local homes and left to get on with it.

“Often they do not have a clue what to do next. Nobody guides them around the system,” Dame Denise said.

She hoped that the star ratings would make it easier to choose a home and also act as a powerful incentive on homes to push up standards. People paying their own fees would almost certainly choose only those homes with 3 or 4 stars. People whose care was being arranged and paid for by local authorities would have an equal interest in star ratings.

“If you were offered only 1-star homes you might go to your local councillor and ask why this was happening and what was to be done about it,” she said.

Dame Denise said that small, independently run care homes had as good a chance of getting a 4-star rating as establishments run by major chains.

“You can have big glossy premises, where the actual care people get is routinised, and you can have small establishments where you have really good staff who are willing to go the extra mile for residents,” she said. The provision of good-quality care did not just mean ensuring that people received their medication on time and had nourishing food, it also meant enabling residents to maintain their interests.

“If a resident is a music lover, for example, she should be helped to go out to see a performance. Your interests should not have to stop just because you are in residential care,” she said.

She expected that older people or those with elderly residents might even start moving home to be within the catchment areas of 4-star homes, in the same way that parents move into the catchment areas of the best schools.

Details of the rating system will be published in a consultation document next month, with the stars being introduced from next April.

Dame Denise said that inspectors would carry out spot-checks to ensure that standards were maintained. Residents from other homes would take part in inspections to give a consumer’s view of services.

Care-home owners last night gave a guarded response to the measure.

Martin Green, the chief executive of the English Community Care Homes Association, which represents 2,800 independent care-home owners, said: “Care homes are underfunded. There has to be a closer link between the amount local authorities are prepared to pay for care and quality.”

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