The aim of the White Paper is to defuse growing resentment among Tory supporters in "Middle England" - the battleground for the next election - over elderly people being forced to sell their houses to pay for long- term care.
Mr Dorrell is hoping to persuade more people to cover the cost of their long-term care through insurance, annuities or flexible pensions, which could be geared more towards paying the fees of homes for the elderly.
Labour will accuse the Government of "mugging the elderly" with the plans. Sources close to Tony Blair said last night the Labour leader strongly opposed the scheme and Harriet Harman, the party's health spokeswoman, is planning to attack it as "mugging Middle England".
The schemes will be voluntary, but legislation will be introduced in November to implement after the election.
Ministers are also worried about the spiralling cost of long-term care, and the increasing likelihood that more people will be requiring expensive long-term care into the next century. Officials have estimated that the numbers over 80 who own their own homes will rise rapidly from 50 per cent to 70 per cent of the population aged over 80 by the year 2013.Reuse content