The government claims the complex judgement will save it hundreds of millions of pounds a year because it has clarified that the NHS is not solely responsible for providing long-term care free-of-charge to all those who need it.

However, campaigners say its wording means that the majority of old people who need to stay in nursing homes will get free care.

The court ruled that the NHS can shift responsibility for some free long-term nursing care to local authorities which can then pass on the costs to patients who have the means. However, this can only take place where the patient needs general nursing care, and not specialist care.

BBC News' Alison Holt reports on the ruling

Health Secretary Frank Dobson said he was "delighted" by the judgement, which would safeguard funding for people who needed NHS nursing home care.

The ruling - set to be a crucial landmark in the future of long-term care - came in the case of Pamela Coughlan who was left severely disabled following a car accident more than 20 years ago.

Her solicitor, Fiona Macintosh, said that although some nursing home residents would pay for care, those whose primary reason for staying in nursing homes was medical should stay free of charge.

Dr Chai Patel, Chair, Continuing Care Conference: Eligibility criteria for nursing care ' a complete dog's dinner'

She said: "Nobody goes into a nursing home unless their predominant need is for nursing care, and the court has ruled that in these circumstances, the whole cost of the placement must go to the NHS."

Although Master of the Rolls, Lord Woolf, ruled out the general principle of free social care for all, he and two other appeal judges ruled in favour of Mrs Coughlan, and dismissed an appeal by a health authority over the closure of her care home which was ruled unlawful.

Supporters say the fact that Mrs Coughlan was able to win her own case sets a precedent for others to challenge their treatment in the courts.

Mrs Coughlan is looked after at Mardon House in Exeter, a nursing home which offers a mixture of rehabilitation and long-term care.

Home for life

Pamela was told she had a home for life

When they moved in, Mrs Coughlan and the other residents were given a guarantee that it would be a 'home for life'.

But early last year the health authority told them they wanted to close it down and move them out to local authority residential homes and that social services would be responsible for them.

Christine Hancock, Royal College of Nursing and David Lipsey, Royal Cssn on long-term care of the elderly discuss funding

This meant that Mrs Coughlan and the other residents would lose their entitlement to free NHS care, and instead faced the prospect of being means-tested and charged for social services' help and accommodation.

Mrs Coughlan challenged the decision in the High Court last year and won.

The High Court accepted that Mrs Coughlan was entitled to health care and not social care - and that the NHS should pick up the bill.

North and East Devon health authority was judged to have abused its power in breaking its promise to the residents.

Its consultation over plans to close the home was declared unlawful.

The health authority appealed against the judgement last month, and was backed by lawyers for the Health Secretary Frank Dobson.

The Court of Appeal ruled that the health authority was in the wrong in the Coughlan case and upheld the High Court decision.

But it also decided that the general principle that the NHS could shift responsibility for care to social services was acceptable.

Dobson delighted

Mr Dobson said: "The sole reason why the Department of Health intervened in this case was to ask the court to clarify the powers of social services authorities to make arrangements for the provision of nursing care.

"This judgement confirms that social services authorities may make such arrangements and confirms our understanding of the current legal position."

The judgement applies in England and Wales but not in Scotland.

There are 157,500 people receiving long term nursing care in England, 42,500 of whom pay for their own care.

The Age Concern charity had predicted that if the Government had lost the case, it could have cost an extra £220m a year to provide care for those people.