LONDON, Dec. 9 (Xinhua) -- Elderly people in Britain are to be given money to pay for their own care in a move hailed as one of the most radical welfare reforms in a generation.

    They will have the right to decide how and where they spend the cash, and take control of their daily lives as well as a higher standard of service, The Observer reported on Sunday.

    Under the system, which will start from April 2008, elder people or their chosen relatives will set up bank accounts into which councils will pay a monthly sum. Beneficiaries will receive the cash after means tests taking account of their health and personal needs. They will then be able to shop around for the best packages of care.

    The move follows the six-month Dignity at Home campaign by The Observer, which has called for far more responsive services for the elderly. One key objective was to give people the right to choose their own home helps and personal carers.

    Around 900,000 people over 65 are currently unable to live independently without help. And the number is due to rise to more than 1.3 million by 2025.

    Health Secretary Alan Johnson, who will announce the new measure on Monday, said it "represents a radical transfer of power from the state to the public. Everyone, irrespective of their illness or disability, has the right to self-determination and maximum control over their own lives."

    The shift of funding from local authorities to individuals is worth around 8 billion pounds (some 16 billion U.S. dollars) a year and is likely to create a far more aggressive market as agencies will compete to offer the best packages of care, said the report.

    The move could also see the transfer of money from the National Health Service into the bank accounts of those with chronic and long-term conditions such as diabetes, who would like to buy their own care.

    Simon Milton, chair of the Local Government Association, described the new system as a "landmark agreement" between councils and the government.

    "It should provide the foundation to give people independence, choice and dignity over their lives," he said, adding that "By working together, we can begin to plan for and provide a modern, efficient service that should give people the best possible care at the right time and in the right place."