Douglas Fraser: "What's Labour's position on a referendum today?"

Wendy Alexander's beleaguered shadow cabinet faces another tough dilemma tomorrow on how to respond to Lord Sutherland's follow-up report on free personal care for the elderly.

All the other parties at Holyrood are likely to back a motion this week echoing Lord Sutherland's call for Westminster to hand back the £30m annually in attendance allowance (AA) seized back when Scotland went its own way on the policy six years ago.

But with Gordon Brown yesterday signalling support for a new insurance-based model for the future of social care south of the border, policies are set to diverge and Ms Alexander will be put in a difficult decision during Thursday's Holyrood debate on the Sutherland Report.

Her party said a fortnight ago that it accepted the report and all its recommendations. But one of these saw Lord Sutherland state unequivocally that Westminster had been wrong to withdraw AA from those in care homes and he called for this money to be reinstated as it would make up the bulk of the current £40m shortfall in the system.

The Tories indicated yesterday that they were unlikely to challenge any aspect of a motion on Thursday calling for the reinstatement of AA cash to help fund the Scottish scheme, while the Liberal Democrats have been vociferous in their condemnation of Westminster's stance on this.

Health Secretary Nicola Sturgeon announced last week that the government would find the £40m required to meet Lord Sutherland's concerns but would be leading demands for the return of the AA money.

"Lord Sutherland's report and all his recommendations received widespread support a fortnight ago and we would expect that the motion being discussed on Thursday would receive similar backing," said Ms Sturgeon yesterday.

A spokesman for Ms Alexander said yesterday that any motion formally tabled for consideration on Thursday would be discussed by shadow cabinet tomorrow. "The motion could be amended. There has been no decision yet," he said.

Lord Sutherland said at the launch of his report on April 28 that he hoped the forthcoming review of social care in England and Wales would allow Westminster to reconsider the withdrawal of the AA money from the Scottish budget.

But the emphasis yesterday was on an insurance-based solution to the issue, which the government said could see a £6bn funding gap arise over the next 20 years.

Speaking as a six-month consultation was launched on the issue south of the border, the Prime Minister said he fully understood people's anxieties over the issue of social care.

"We can, and must, look to give people the opportunity and the support to save for their old age in a way which insures them and protects their houses and their inheritance," he said.

Liberal Democrat leader Nick Clegg said: "Elderly people in desperate need of better care will now have to wait until the next election before any action is taken. This is totally unacceptable."

Nick Kirwan, of the Association of British Insurers, described the consultation as a "very positive" development.