The Health Secretary refused yesterday to rule out plans for a “death tax” to pay for care for the elderly.

Andy Burnham would not commit the Labour Party to a single policy option before a long-awaited White Paper on the future of social care funding is published this month.

But after a debate on the issue with the Conservatives and Liberal Democrats, he set out in detail what a “compulsory” model of public funding could look like.

The model — endorsed by most patient groups and believed to be favoured by ministers — would involve every adult in England paying towards the cost of a new National Care Service, a universal system to provide free services to the elderly at the point of need, much like the NHS.

The Tories have attacked the idea as a £20,000 “death tax” which would be deducted from a person’s estate when they died.

Instead, they propose a voluntary system whereby people could pay an optional, one-off payment of £8,000 towards insurance to cover the cost of future residential care.

Critics say that the optional scheme would have low take-up, and would not generate the necessary funds to cover the costs of an ageing population.

Mr Burnham denied that a single amount would be charged to everyone under a compulsory system, and said that a range of options were still being considered, including a 10 per cent levy on the value of a person’s estate, or paying a means-tested amount in instalments over the course of retirement.

“[Another] option could involve someone deferring their state pension, for instance, by working to the age of 68, and paying their contributions into the National Care Service,” he said.

“That might suit some people but not others, such as manual workers who are healthy but worn out when they get to 65.”

Yesterday’s debate, hosted by Age Concern and Help The Aged, was the first meeting between the three main parties to discuss the issue since consensus talks broke down in acrimony last month.

All three parties agree that the current system of means-tested care is unfair, and have promised to introduce legislation in the next Parliament to ensure that in future people will not have to remortgage or sell their homes or spend their savings to fund the costs of residential care or other services.

Campaigners estimate that the social care budget needs to increase by £370 million a year just to keep pace with the rising costs of caring for an ageing population.

But despite pleas from council chiefs for unity, hopes of reaching a cross-party deal on the issue were dashed after the Conservatives vetoed any discussions involving a compulsory levy.

Mr Burnham said that he was still debating the pros and cons of different funding options, and had yet to seek Cabinet approval on the contents of the White Paper, expected to be published close to the Budget.

Andrew Lansley, the Shadow Health Secretary, accused the Health Secretary of wanting to impose a tax on grieving relatives, and of not being straight with the British people.

“It is incredible that the Government is set to publish a White Paper outlining their death tax policy within the next three weeks and yet the Health Secretary claims he is still weighing up various options. He is treating people like fools,” he said.

“We have had 13 years of a Labour Government with absolutely no reform or help for elderly people. The time for talking is over. Each party should set out their policies and let the people decide in the general election, which is the best approach.”

Norman Lamb, of the Liberal Democrats, said that the Tories’ plans were “unworkable, unfair and unaffordable”, adding that two thirds of pensioners would not be able to afford a £8,000 voluntary contribution.

Social services directors urged the parties to stop the “political bun fight”.

Andrew Harrop, director of policy and public affairs for Age Concern and Help the Aged, added: “All the options being discussed require more public money, in one way or another, and politicians need to say where it will come from. There is no such thing as a free lunch.

“In our view, none of the parties has yet set out credible proposals for comprehensive reform of the care system. In particular, they need to say how they will improve the quality and availability of services. We urge them all to set out their plans in full before the election to give voters a choice.”