The Department of Health has announced a relaxation in the standards required of care homes.

In a move seen as an admission of government failure to address the lack of provision in the care home sector, the government decided to loosen regulation on national minimum standards, especially with regard to environmental quality.

Health minister Jacqui Smith stressed that the changes would not adversely affect patients.

"We listened to care home owners, residents and their relatives about the national minimum standards. We want good care homes to carry on providing a valuable service - vulnerable and older people should not have to worry about how their home will meet the costs of some of the more challenging standards," she said

In a separate development, the Lords rejected a government bid to introduce fines for local authorities which failed to discharge patients to intermediate care.

Conservative and Liberal Democrat peers amended the legislation, deciding that social services lacked sufficient staff and resources to meet targets within six months.

It was also argued that fining authorities would merely exacerbate the already apparent shortage of cash to invest in the care home sector.

Shadow health secretary Liam Fox claimed that the Lords had struck a blow for "common sense".

"The Lords have rightly told the government that their approach has been wrong from the start and that they must now back off," he said

Speaking for the Lib Dems, Paul Burstow slammed the government for fostering a situation where patients were "like unwanted packages in a macabre game of pass the parcel".

But Department of Health officials insisted that plans would not be derailed.

"Elderly people stuck in hospital unnecessarily expect action sooner rather than later," said a spokesman.

"We must keep the momentum going in order to build on the good progress that has already been made in reducing delayed discharge from hospital. To do otherwise will be a disservice to those people currently in an acute hospital bed when they are ready to be discharged to more appropriate care."

Unison, the UK's largest union, condemned the government for creating tensions between social services departments:

"This is the wrong solution. There has been a decline in acute hospital beds but no corresponding rise in community care provision. Home care provision has been allowed to run down over the past 20 years. Local authorities should not be singled out for punishment," said the union.